How do data losses, like what happened at Amazon, affect business adoption of cloud services?

Reports indicate that Amazon’s cloud had a loss of data.

Chief executives and their teams that I visit with seem to be largely polarized. Most of them are very open to switching to cloud services. Then, the other camp is adamantly against trusting their most important data to be stored in the cloud.

The camp “for” using the cloud cite advantages such as:

• No need to worry about backing up your data anymore (I disagree on this one by the way—I feel strongly you need to keep a local copy of your data as well).
• No need to purchase and support the servers that you would otherwise need to host the
  application in-house.
• Built-in disaster recovery options provided by the data center infrastructure. IT professionals at the cloud service are very familiar with configuring and supporting the applications—so there is little if any need for the businesses to keep that expertise in-house.
• and more.

The “against” group adamantly points out they aren’t going to the cloud because:

• They can no longer customize their programs.
• They may lose their important data (like the Amazon example).
• If their office’s Internet connection goes down, they are dead in the water.
• They do not trust their most private data to be hosted in the cloud.
• and more.

With the possible exception of not being able to customize their applications, effective controls exist to mitigate all of the drawbacks listed above.

Where are you? Do you trust the cloud with your online backup service? Do you use hosted e-mail? What else do you put into the cloud? How do the pros outweigh the cons in your decisions?

Please post your comments on this blog.