For example, Connecticut's wage and hour laws require employers to keep track of various records of the employee including hours worked, etc. The catch? Such records need to be kept at the employer's place of business for three years. Does storing the information in "the cloud" satisfy that?
And suppose an employee is fired for improper use of the Internet and you want to "image" (or copy) the computer that the employee has worked on to preserve the evidence. How do you do that when the computer you want to image may be in a server thousands of miles away?
Or consider the lawsuit filed by an employee and the call that needs to go out to your IT department to put a "litigation hold" on your data. How do you do that when it's based in the "cloud"?