CATIII
your worries are well founded
M$ have had several data outages in the last 12 months or so, leaving considerable numbers of customers stranded without data over several days.
the privacy aspects are also worth considering: in many cases a company has a legal requirement to keep its data secure: e.g. personnel records, customer data...... don't forget the requirements of the data protection act apply, meaning you have to be able to provide clear evidence of secure storage.
With the cloud providers usually refusing to give any assurances of where in the world the data is held, by the very act of using a cloud service many companies are immediately in breach of UK law. If you were a charity or similar holding data on e.g. vulnerable individuals, then the legal exposure is potentially extremem
Mike
what triggered the question? By coincidence I got a call from M$ yesterday asking if I was interested in training to help me market Office365 / cloud