Please visit cloud security alliance for all security related concerns.

If you ignore the risk of physical access to servers with critical data (which is highly unlikely), there are two points where data might be compromised.

The first is the traditional "intruder problem", where the point of access to applications which connect to those services is compromised. i.e. Someone breaks into an office, logs into a PC with software required for accessing the could hosted service.

The second is high-jacking data on the route of communication if older encryption algorithms, bad key handling systems and poor security methods are used to ensure communication "security".

This pretty much goes for any apps and services hosted somewhere other then the place of access (or remote access), and so is for cloud hosting as well.

Other risks are all based on how well is the security of the cloud hosting company's handled and are there any ways to break into the system with administrative privileges. Also, are the admins even allowed to temper with client's services and apps (whatever those services may be).

If the official policy is that the cloud company's admins can enter the virtualized environments of their clients, then it is theoretically possible for sensitive data to be acquired if specific administrator accounts credentials are high-jacked.

Or if the admin himself takes and sells information, but this is more of an industrial espionage problem there on...

This brings me to a question through situations I have recently experienced and also one that was spoken about an a recent conference. They relate to the major cloud hosting services in the USA.

In one instance the server "somehow" went down - without any excessive load on the domain and then took a while to come back up. that could be a result of load from another VM process eating up the memory OR could be an intrusion attempt. My suspicion comes around why it took so long to bring back up with no other explanation.

The other relates to attendees speaking about the infra-structure of one of the largest providers discussing how un-secure it was without too much explanation of details. All the hardware is connected via gateways and ip addresses, so technically during transmission is a great threat of compromise.

The standard corporate espionage or admin selling access codes is a little expensive to scale from an organized intent perspective. There would be thousands of accounts with a variety of types of code/data and functionality. The only reason to take this approach would be to create a smoke screen around the target.

I am curios to learn more about actual breaches that are documented since most will not disclose a breach if they can dispute it.

The major problem in cloud security is data storage security.

Ex: if you stored single file on cloud, there's possibility of hacking (in any way)

So one baseline solution is to store as a encrypted format. But this encrypted file can be hacked...So we need to improve security by implementing dynamic storage of splited files.(i.e. make chunks of encypted file and store it on different nodes applying some self defined algo.)

you can refer RSA.COM for similar issues regarding cloud security.