Explanation
With cloud data storage, the storage provider will have large enterprise SANs providing large pools of storage capacity. Portions of the storage pools are assigned to customers. The risk is that multiple customers are storing their data on the same physical hardware storage devices. This presents a risk (usually a very small risk, but a risk all the same) of other customers using the same cloud storage hardware being able to view your data.
The mitigation of the risk is to encrypt your data stored on the SAN. Then the data would be unreadable even if another customer was able to access it.