For four hours last week, a flawed authentication update allowed anyone the ability to access the data of any user of the cloud storage service Dropbox.

The error could have caused a massive privacy breach. As it turned out, the company was notified and fixed the error before widespread knowledge allowed the vulnerability to be exploited by malicious actors.

"According to our records, there were fewer than a hundred affected users, and neither account settings nor files were modified in any of these accounts," the company wrote in a blog post last Friday. "At this point, we have contacted all these users and provided them more detail."

Security experts point to the incident as a reminder that the consumer cloud can still cause problems for businesses. While Dropbox is aimed at individuals, the company has not made a secret of its business aspirations: Last year, it surveyed usersabout how they use the service to help their businesses. Articles on the benefits of cloud storage services, such as Dropbox and iCloud, are widespread on the Web.

Consumers are increasingly bringing their personal technology into the workplace, much to the chagrin of CSOs. With cloud services such as Dropbox, companies need to make sure that sensitive corporate data is not being posted to the cloud.

Dropbox encrypts data on the servers, but not to individual accounts, notes Sorin Mustaca, a product manager with security firm Avira. Anyone with admin access to the server can read all of its data. In addition, data on the servers of external services have lesser legal protections, Mustaca says.

"I always advise our users to be very, very careful what they put online because if they put anything online, then the data does not belong to them anymore -- it belongs to the cloud," Mustaca says. "This is the most important lesson that needs to be learned by anybody. If you put it online, you lose control of the data."

Cloud services should allow users to encrypt their information, thus making mass breaches much more difficult, if not impossible. A week ago, Dropbox users started calling for better encryption, but it isn't clear yet whether the service provider will offer that feature. Dropbox prides itself on its ease of use -- adding individual passwords would make the service more difficult to use and more costly, says Puneesh Chaudhry, co-founder and CEO of data management start-up Copiun.

"One part of security is the comingling of data and being able to mitigate the threat by encryption," Chaudhry says. "Dropbox comingles data from everybody in a huge data store, and that is a concern to a lot of companies."

Dropbox declined to comment for this article. But Dropbox is not the only consumer cloud service that has been the focus of security concerns. Evernote, Apple's MobileMe, iCloud, and cloud offerings from Google and Amazon all have generated security concerns in recent months.

Barring employees from using cloud services usually does not work, Chaudhry says. Companies attempted to bar the use of social networks, but employees found ways of using the services anyway, he notes.

Instead, enterprises should require that employees use data storage that has an encryption key the company can access as well, Chaudhry says. If the company has the key, then it can prevent access to the data if the employee is terminated or if the data is otherwise compromised, he observes. "We need solutions that run within an enterprise's security mechanisms ... and yet provide employees with a facility that allows Dropbox or iCloud functionality," Chaudhry says.

Several services offer more extensive encryption than Dropbox -- and for a higher price -- and Copiun sells a product that allows companies to offer their own servers as a cloud service.

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