Individual users that buy domain names through Network Solutions can breathe a sigh of relief. The data breach of the domain registrar and hosting company says these customers were unaffected.

However, Network Solutions announced Sunday that the breach of nearly 574,000 individual consumer account records affects its e-commerce customers, or the small businesses that use the company to process credit card orders.

“We would like to take this moment to make it clear that the incident reported on Friday is solely related to Network Solutions e-commerce customers. Customers of Network Solutions that have other products such as domains, email accounts, hosting and online marketing were not impacted by this event. Also customers’ transactions that occur (or occurred previously) at Networksolutions.com were not impacted by this.”

In real terms, the breach affects 4,343 business accounts - or roughly 43 percent of Network Solution’s e-commerce customers, according to the company’s Web site. The company is offering to pay for credit reporting services of affected customers. The service will help affected customers notify their customers of the breach.

Reports began surfacing late Friday (July 24) of the breach, which began March 12 and detected June 8. For three months, malware planted on the Network Solution’s network, skimming credit card and purchasing transaction data. Network Solutions says it doesn’t know how hackers planted the malware, and it’s working with law enforcement to investigate the incident.

In a press release, Network Solutions says there is no evidence that any of the credit card data has been misused. While somewhat comforting to affected accountholders, businesses using Network Solutions’ e-commerce processing services worry about who will take the reputational hit resulting from the breach. One small business that sells sporting gear to teen boys is worried that they will suffer the breach of trust with customers because Network Solutions’ security lapse.

“We are extremely concerned that our customers will not distinguish between a problem that Network Solutions had and blame us on industry forums. We think the notification letter should not include our domain or company name unless it is absolutely required by a statute in our state. It should indicate that there was a breach at a Network Solutions site that caused the issue and they can take the fall for this. We are just a small family business in a very chatty niche industry where customers live on forums to gossip about the various retailers and brands. This is spelling disaster,” the business owner tells Channel Insider.

The Network Solutions incident raises serious questions about who owns the blame for security breaches in the cloud computing era. As more businesses move their operations to the cloud and Web-based services, they’re placing their trust in the hands of strangers. And when those services are breached by hackers (and they will be), the service will take a reputational hit amongst its immediate customers, but the users of a service will be left to the subscribers to explain to their customers.