Michael Witz, founder of online file-sharing site FreeDrive, knows the horror of that proverbial middle-of-the-night call: "The site is down."

He lived the nightmare last fall when a fiber link between a Web server and 6TB of stored customer data went poof. With no access to customer data, Witz knew the Carlsbad, Calif., company needed a better storage strategy.

"Building your own storage system - it's not easy. It requires special knowledge. It's not in our core competency," Witz says. "We had a choice. We could build out our storage infrastructure, outsource it to a data center, make a capital investment in our hard disks, or we could outsource it to [a cloud service provider] like Nirvanix or Amazon."

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Deciding on the latter option was "really easy," Witz says. Indeed, cloud storage - or, as he calls it, "an Internet hard drive for companies" - is emerging as an attractive storage option for an increasing number of companies that depend on delivering services over the Web. That's because with cloud storage, data resides on the Web, too, located across storage systems rather than at a designated corporate or hosting site. Cloud-storage providers balance server loads and move data among various data centers to ensure that information is stored close - and so delivered quickly - to where it is used. Cloud-storage users typically don't know where their data is stored at any given time.

Big clouds

The best-known cloud-storage service is Amazon's 2-year-old Simple Storage Service (S3). Cloud storage also is available from start-up Nirvanix, which launched in October 2007; and now through Mosso, a Rackspace company that unveiled its offering early this month. Amazon remains tight-lipped about its cloud infrastructure, but Nirvanix says it uses custom-developed software and file-system technologies running on Intel-based storage servers at six locations on the United States' East and West coasts, as well as in Asia and Europe. By year-end, the company expects to expand that number to more than 20. Customer data is replicated in two or three locations. Mosso initially is delivering its storage cloud from Rackspace's Dallas data center, with another site in the United Kingdom likely to be added soon, the company says.