Outages are becoming a distressing fact of life for Microsoft’s cloud e-mail customers, and users of other cloud services such as Google Apps. Two weeks of e-mail glitches plagued Exchange Online customers using Microsoft’s Business Productivity Online Suite (BPOS) in May. Office 365, the successor to BPOS which launched in late June, suffered an e-mail outage in August and then again last night and this morning.

Google Docs suffered an outage this week, and Amazon’s Elastic Compute Cloud infrastructure-as-a-service platform was plagued by outages and lost customer data in April and August.

The latest Microsoft outage was caused by what the company vaguely called a “DNS issue” and affected not just Office 365 but also the consumer services Hotmail and SkyDrive. The outages were spread throughout the world.

Taken together, the outages may put second thoughts in the minds of IT executives considering the move from locally hosted Exchange servers to Microsoft’s cloud, to Google Apps or to Amazon’s cloud.

Of course, IT systems can go down whether they are run by customers in their own data centers or outsourced to cloud vendors. But large institutions with multimillion dollar IT budgets may be able to achieve greater reliability by keeping IT in-house, without worrying about sensitive data residing in a vendor’s data center.

In response to the Hotmail and Office 365 outages, Microsoft tells Ars “On Thursday, September 8th at approximately 8:00pm PDT, Microsoft became aware of a DNS issue causing service degradation for multiple services. We achieved full service restoration at approximately 11:30pm PDT. We are conducting a review of our processes. We appreciate your patience.”

The Hotmail outage was discussed further on Microsoft’s Windows Live blog, which said fixing the problem required “propagating our DNS configuration changes around the world.” Microsoft’s Office 365 team kept customers updated on Twitter. Despite Microsoft’s statement that all problems ended at 11:30pm PDT, the company was still receiving complaints from customers via Twitter 8 hours later. In response to those complaints, the Office 365 team tweeted “We are investigating an issue for a small number of customers.”

Google was also forced to explain itself this week.

“On Wednesday we had an outage that lasted one hour and meant that document lists, documents, drawings and Apps Scripts were inaccessible for the majority of our users,” Google Docs Engineering Director Alan Warren wrote in a blog post. “The outage was caused by a change designed to improve real time collaboration within the document list. Unfortunately this change exposed a memory management bug which was only evident under heavy usage.”

Cloud services may make the most sense for small business owners, such as Paul Burns, an IT industry analyst whose small firm Neovise uses Office 365 for e-mail and other services. Last night, Burns says he was able to access e-mail through the Outlook client on his Windows desktop, but could not get mail on his mobile phone or through the Office 365 Web interface.

The outages are starting to become “a little bit of par for the course,” Burns told Ars. “There are going to be outages even within corporate IT. People that are investing millions of millions of dollars in keeping e-mail and SharePoint up and running, they’re still going to have outages. But I think for Office 365, it strikes me for a public service that it’s happening a little too often.”

Unfortunately, Burns says it is hard to stay up to date when cloud problems happen. Microsoft’s status portal also went offline during the outage yesterday, he notes. And Burns is troubled by some less serious errors that nonetheless make life harder for customers. Earlier this week, Burns says he was unable to upload an audio file to SharePoint Online, and had to search through customer forums to find a workaround.

On the more critical e-mail issue, Burns notes that customers can regain some control by archiving e-mail locally. “On my Outlook clients I set them up to have all of my e-mail cached locally," he says. "It doesn’t help me send or receive mail when it’s down. But let’s say they lost my data. I’m not expecting them to lose my data, but I would have it all archived.”

With Windows Azure, another cloud service, Microsoft employees have tried to prove it is enterprise-ready by using it themselves. Microsoft’s IT division is also starting to move employees to Office 365.

Google’s Warren says “We use Google Docs ourselves every day, so we feel your pain and are very sorry.”

A Microsoft spokesperson tells Ars that millions of users and more than 20 percent of the Fortune 500 is using Microsoft cloud productivity tools, and lists BPOS, Office 365, Exchange, SharePoint and Lync Online as the services in use. This could include cloud-based versions of Exchange, SharePoint and Lync offered by Microsoft partners.

According to Google, more than 4 million businesses use Google Apps, which includes Docs, Gmail and Calendar.

But for many customers, the decision on whether to go in-house or cloud is murky. When asked if he’s still glad he signed up for Office 365, Burns says “I have been reevaluating it. The outage does concern me but I’m hopeful it will improve over time.”

Update: Microsoft has sent us a revised statement on this week’s outage, which reads: “On Thursday, September 8th at approximately 8 p.m. PDT, Microsoft became aware of a Domain Name Service (DNS) problem causing service degradation for multiple cloud-based services. A tool that helps balance network traffic was being updated, and for a currently unknown reason, the update did not work correctly. As a result, the configuration was corrupted, which caused service disruption. Service restoration began at approximately 10:30 p.m. PDT, with full service restoration completed at approximately 11:30 p.m. PDT. We are continuing to review the incident.”