Concern over data loss and legal uncertainty may delay the development of cloud computing, experts warned on Monday.

Cloud computing involves the storage of data online, rather than on locally networked servers or machines. The best known services are provided by Google and Microsoft.

Last weekend, Microsoft in the United States was forced to admit that it had irretrievably lost all online data belonging to owners of the T-Mobile Sidekick, a smartphone that backs up its data online, in the cloud.

"It's certainly an extraordinary situation," a Microsoft spokeswoman told the Wall Street Journal, adding that Microsoft and T-Mobile "… are working to do everything they can for customers."

No matter how many of the 1 million Sidekick users are affected by the problem in the United States, and no matter how precious or personal any data lost, none of them is likely to have any legal redress, a legal specialist warned on Monday.

“The standard agreements for online storage are heavily in favour of the service provider,” Tom Greenbank, a solicitor with the online specialist law firm Pinsent Masons, told The Times. “We advise our clients to take the standard agreements apart at the seams.

“One online customer service provider we have dealt with has standard delinquency terms of 30 days built in to its contract, meaning that the company has the right to delete all of your company data if you happen to be 30 days late paying the bill.”

Furthermore, Mr Greenbank warned, “Cloud service providers are dropping out of the market left, right and centre, and often no provision is made for the data that they store for users. Is that data, for instance, in a state where it can be downloaded and saved by a subscriber before it disappears?”

Such cautionary words coincided with Rentokil’s announcement on Monday that it intends to outsource much of its corporate IT to Google. The company will introduce Google Apps Premier Edition across its international workforce in over 50 countries, replacing the group’s existing 180 e-mail domains and 40 mail systems across its six operating divisions.

Bryan Kinsella, the Chief Information Officer of Rentokil Initial, told The Times that information security was “something we looked at very closely. We looked at Google’s downtime and degradation, and found it was a lot better than on our existing systems.”

As a corporate user, Rentokil has a duty under the UK Data Protection Act to ensure securely store personal information on others and safeguard this data against loss, theft or misuse. In the event of a catastrophic leakage of data, it is Rentokil, not Google, that would be responsible under UK law.

“Security did worry us,” Mr Kinsella said, “but we have rolled out the Google security package [provided to corporate customers] to 20,000 of our users already, and we are very happy with it.”

Explore Tech & Web

• Personal Tech

• The Web

• Gadgets & Gaming