Companies have been urged to check their regulatory requirements on data storage before starting to prepare for the official launch of Windows Server 2008.
David Hobson, managing director of Global Secure Systems, claimed that firms that fail to notify their customers and regulators of their intention to use Cloud Computing and/or also fail to ensure their personal data is stored in a country that provides adequate protection - could fall foul of the Data Protection Act.
As Microsoft's Azure service is launched with an emphasis on cloud storage, Hobson claimed that there could be a legal challenge to the use of it by companies.
He said: “Whilst Azure is highly appealing, the problem facing many businesses is where their data is actually being stored, as current legislation mandates that firms must indicate to their customers where their data will be stored.
“Revolutionary though Azure is, it's important that companies extend their legal compliance and customer agreements to support Microsoft's Cloud Computing initiative. And that's before we even begin to talk about extending the IT security envelope to support this brave new virtual world of computing.”