AT&T has gone into the cloud storage business in competition with services such as Amazon's S3.

It said Monday that it signed a memorandum of understanding (MOU) with EMC to jointly develop and market an EMC-based enterprise-grade AT&T Synaptic Storage as a Service that's supposed to give users control over the storage, distribution and retrieval of their data from any location, anytime, using any web-enabled device.

The widgetry, which will be available to customers this month on a "controlled" basis, makes use of AT&T's network cloud in its two US data centers to start, expanding later to its international sites.

General availability will start in Q3. AT&T has not released pricing yet.

Users will be able to apply policies to the storage through a customer portal. Capacity of course will scale up and down as needed and users will only pay for what they use.

EMC, which has its own consumer-oriented Mozy service, is kicking its newfangled Atmos technology, a policy-based information management platform, which will accommodate both Internet access as well as access via a virtual private network so that customers can create what AT&T calls a "virtual private storage cloud" protected by its admittedly superior network-based security.

At EMC World Monday EMC unveiled an Internet-delivered cloud storage service called Atmos online for moving and managing large amount of data as well as Atmos internal-to-external federation for moving data from on-premise (or internal) to off-premise (or external) Atmos clouds.

Atmos onLine is supposed to provide instant access to online storage resources to reduce capital expenses and management overhead while EMC called federation a "critical step" in the adoption of cloud-based computing models since most customers are reluctant to move 100% of their information into a cloud Internet infrastructure.

Atmos with federation is supposed to offer the cloud's cost and operational efficiencies, while users keep control of what data resides where.

IDC called EMC's federation a "differentiator."

Meanwhile, Gartner is forecasting that revenue from cloud-based storage and backup will hit about $400 million, up 22%, impelled in part by shrinking storage budgets.

Atmos is targeted at Web 2.0 firms and Internet providers such as eBay and other telecom, media and entertainment companies with massive amounts of data building cloud storage infrastructures.

According to a study released by EMC the amount of digital content created last year was 3% more than all expectations despite the recession. It's following a Moore's Law-style precept: the Digital Universe is expected to double in size every 18 month.

EMC has also started chasing ISVs so they'll use Atmos' API to create applications that leverage Atmos and Atmos onLine.

The federation feature will be available in Atmos this quarter.