Cloud Computing

Cloud Computing appears to be an easy solution to most backup needs. However, Cloud Computing, or putting your data ‘in the cloud’ such as through remote hosting or Terminal Services products could create a false sense of security. The first problem is that not all computer data exists as ‘user accessible files on disk’ – applications which use advanced data management systems such as SQL store data in on-disk files which are not designed to be in human readable format. Simply copying a SQL folder to a different location will not guarantee that it works in the event of disaster recovery. In addition the cloud is subject to hacking. The classic example is certainly what recently happened to Sony’s PS3. Although Sony was not necessarily ‘in the cloud,’ its PS3 servers were open Internet servers, similar in use, availability and hack risk to data in the cloud. 

What is the Sony PS3 hack? http://www.guardian.co.uk/technology/gamesblog/2011/apr/27/playstation-network-hack-sony

Cloud Computing is not a backup system as such, and is subject to denial of service, caused by terrorism and natural disasters. 
What happens when the Cloud is offline? http://www.zdnet.com/blog/saas/lightning-strike-zaps-ec2-ireland/1382

Common Complaints regarding Cloud based backup systems include poor security, slow access speeds, bandwidth restrictions and partial or incomplete backups. This means that a Cloud backup upload could time-out before completing the upload, resulting in partial uploads and potentially unusable backups. Further, all other Cloud based backups are subject to threats such as hacking and Denial of Service attacks. 
Unlimited Cloud based backup dropped http://www.smallcloudbuilder.com/storage/articles/225-mozy-drops-unlimited-backup 
Complaints about Cloud based backup http://www.smallcloudbuilder.com/storage/reviews/277-livedrive-reviewed

Even if you make use of a hosted service, make sure that an effective working backup system is in place.