The concept behind cloud computing is to make computer resources scalable with applications and data on third-party servers accessible on the web. In the Sidekick case, Microsoft 's Danger subsidiary hosted the data.

Other companies, including Google and IBM, have embraced cloud computing. Worldwide, cloud-computing revenues are expected to total $17.4 billion this year, according to a Sept. 29 report by IDC. By 2013 that number is expected to jump to $44.2 billion.

"It's clear that cloud computing is of growing interest, not just to the technologists, but to the money people -- the CFOs, CEOs, procurement VPs, as well as senior IT execs -- who think about the capital and cost implications of IT," IDC analyst Frank Gens said.

Questioning Safety

But some observers say cloud computing isn't a safe way to store data. The Electronic Privacy Information Center, a Washington, D.C.-based public-interest group, has long questioned cloud computing.

"There are many risks for cloud-computing customers that should be explored and new legislative and regulatory frameworks developed to assure the confidentiality and privacy of data," the group's web site says.

In May EPIC filed a complaint with the Federal Trade Commission against Google and its cloud-computing services, saying Google had not properly explained the risks involved in storing users' personal information in the cloud.

That complaint came after Google announced it had unintentionally disclosed user-generated data.

Growing Concern

As of September, nearly 70 percent of Americans were using webmail services, storing data online, or using applications whose functionality resides on the web, according to EPIC.

Organizations such as the Pew Internet and American Life Project have reported that consumers are concerned about cloud-computing services. At least 90 percent of cloud application users are worried that data stored with one company could be shared or sold to other companies, according to a September report.

Another survey of Internet users published in March found that 35 percent of those surveyed believed their privacy had been violated at some point over the previous year.