Microsoft

The massive data failure at Microsoft's Danger subsidiary threatens to put a dark cloud over the company's broader "software plus services" strategy.

A key tenet of that approach is that businesses and consumers can trust Microsoft to reliably store valuable data on their servers.

T-Mobile Sidekick Slide

(Credit: Corinne Schulze/CNET)

A week ago, though, Microsoft's Danger unit experienced a huge outage that left many T-Mobile Sidekick users without access to their calendar, address book, and other key data. That's because the Sidekick keeps nearly all its data in the cloud as opposed to keeping the primary copy on the devices themselves.

Things got even worse on Saturday, as Microsoft said in a statement that data not recovered thus far may be permanently lost. It's not immediately clear how many people lost their data. The outage earlier in the week affected a broad swath of Sidekick users, though many had data return during the week.

While outages in the cloud computing world are common (one need only look at recent issues with Twitter or Gmail), data losses are another story. And this one stands as one of the more stunning ones in recent memory.

The Danger outage comes just a month before Microsoft is expected to launch its operating system in the cloud--Windows Azure. That announcement is expected at November's Professional Developer Conference. One of the characteristics of Azure is that programs written for it can be run only via Microsoft's data centers and not on a company's own servers.

It should be pointed out that the Azure setup is entirely different from what Danger uses: the Sidekick uses an architecture Microsoft inherited rather than built (Microsoft bought Danger last year). Still, the failure would seem to be enough to give any CIO pause.

Update, 2 p.m. PT, 10/11/2009: I asked Microsoft for comment Saturday when I was writing this, in particular as to how the rest of its cloud might differ from the Danger set up.

Microsoft said Sunday that its the fabric controller that manages the Azure service is built with redundancy in mind.

"We write multiple replicas of user data to multiple devices so that the data is available in a situation where a single or multiple physical nodes may fail," Windows Azure general manager Doug Hauger said in a statement to CNET News.

That doesn't mean Azure is immune from data loss, though I'm told an entire data center would have to be wiped out, as opposed to just a server or collection of servers. I'd be interested to know whether Microsoft will also offer multiple location options so that users that want to can have their data in more than one physical spot as well.

But that's just one of many questions raised by this spectacular failure. Among the other questions still looming large in my head are:

1. What backup procedures did Danger have?

2. Just how many of T-mobile's Sidekick customers lost their data? (Feel free to let me know, Sidekick users.)

3. What impact will this have on the Pink project, which was largely seen as the evolution of the Sidekick, and some say was already in trouble?

4. Will this hurt Microsoft's efforts to build a brand around the notion of Windows Phone even though that uses a different architecture (with its own challenges, to be sure)?

Ray Ozzie is a big believer in the cloud. But he knows that large businesses don't yet share his confidence.

"Enterprises will not really trust the cloud until they get some experience with it," Ozzie said, during a speech at a J.P. Morgan investment conference in Boston on Wednesday. He said that large businesses are more likely to start by going with an online version of a familiar product like Microsoft Exchange than they are today to move a major piece of their business into the cloud. A Webcast of his speech is available on Microsoft's investor relations page.

In October, Microsoft announced Windows Azure, a set of tools that is somewhat akin to a Web-based operating system that developers can use to build software that can then run in Microsoft's data centers. The software is now in testing, with large businesses mostly just kicking the tires at this point.

"In the next year or two I believe that the biggest impact of cloud computing is going to be in things like Exchange and SharePoint for us or those comparable offerings from our competitors," Ozzie said. Using one of those services allows a company to know how much bandwidth they need to communicate with the cloud, understand how cloud services can be managed, as well as just build up a certain comfort level.

"It will work its way into other parts of the enterprise IT environment over time as they get their comfort level," he said.

Ozzie

(Credit: Microsoft)

One of the lighter moments came when Ozzie was asked what were the lessons Microsoft learned from Windows Vista.

"How much time do you have?" Ozzie quipped.

Ozzie then went on to discuss some of the problems with Vista, including the false starts that he said resulted from "overcommitment."

"We had a vision that was larger than what we could achieve within the period of time that we needed to bring (the product) to market," Ozzie said.

And by changing its timing and feature set, Ozzie noted that Microsoft's partners were both too early and too late when it came to deciding when to spend time on Vista.

"If we don't give very clear predictable signals to those partners...about dates," Ozzie said, "they don't know when to invest and when not to invest."

The result, he said, was that drivers weren't ready, leaving PC makers in a tough position and ultimately creating a less-than-satisfactory experience for consumers and businesses. Many of those issues, he said, were taken to heart when it came to planning and communicating around Windows 7, he said.

Some of Ozzie's more intriguing comments came when he talked about the need for partnership over time as Microsoft builds out its cloud. So far, Microsoft has built its own data centers, but they have largely been in the U.S. Because of varying regulations in different countries, though, Ozzie talked about the need for data centers "everywhere on earth."

"Every country will have data centers," he said, but added that Microsoft itself doesn't have the resources to build a cloud in each country. "We have to have partners."

Microsoft is again trying to convince the partners that sell its software that they can make money in a world in which customers are getting their software as a service directly from Microsoft.

At its annual partner conference, which is taking place this week in Houston, Microsoft offered more details on the finances that buttress that claim. For example, partners that sign up customers for the new $15-per-month bundle of hosted SharePoint, Exchange and Office Communications Server can get a 12 percent referral fee. The partners can also get a 6-percent cut of renewal fees provided they continue to be associated with the customer and get positive evaluations.

"We expect that to be a competitive entrant," Microsoft partner program VP Allison Watson said in a telephone interview following Tuesday's keynote speech

There's also room for companies to make money hosting Microsoft's products, she said. The key, she said, is for companies that want to host the same products Microsoft does to make sure they are either tailoring their product to a specific market, combining it with other elements of their customer's workflow or offering additional uptime guarantees that aren't part of Microsoft's product. "Our partners are not offering just a vanilla service," Watson said.

As part of Tuesday's keynote, partners also got to see a series of demos of unreleased products, such as efforts in robotics, Microsoft's online telescope, and Silverlight running on Windows Mobile (though that is still a year a way from being on the market, Watson said.) The company also showed off something it dubs a "replaceable PC,"--basically a combination of SoftGrid application virtualization and other technologies used to allow businesses to replace a worker's computer with new hardware and have them up and running in a few minutes' time.

Microsoft has a few more announcements scheduled for Wednesday, including a program designed to help fill the talent gap by connecting partners with the students who take part in the company's annual Imagine Cup.

And, as it is doing in many of its units, Microsoft is creating a "labs" component to its partner program. The first effort there is a social networking tool that will allow partners to collaborate and share ideas with one another. Microsoft is also announcing a new version of its online tool that connects customers with all of the thousands of partner-created tools in a vast database.