If you're a Sidekick user who has been waiting out the past week's data outage in hopes of a happy ending, you're not going to like the joint press release that Microsoft and T-Mobile put out on the matter this past Saturday. The release contains a line that no service provider ever wants to see in print with their name attached to it: "Regrettably, based on Microsoft/Danger's latest recovery assessment of their systems, we must now inform you that personal information stored on your device—such as contacts, calendar entries, to-do lists or photos—that is no longer on your Sidekick almost certainly has been lost as a result of a server failure at Microsoft/Danger." Ouch.

Any of your data that's on Microsoft's servers is just gone, and the only possible backup of it is whatever's cached in your device's local memory—so do not allow your device to lose power, T-Mobile and Microsoft/Danger warn in the press release's headline, or you'll never see your data again.

As a make-good for the inconvenience of denying you service for seven days and then losing your data due to a failure to back it up properly, T-Mobile is offering customers one month of free data usage. If the irate response on various bulletin boards is any indication, T-Mobile could've just given customers the finger and it would've had the same effect. Of course, it's not clear what could possibly be done as a make-good for a blunder of this magnitude, since what customers really want is not free data but their data, restored back to their accounts.

This outage and subsequent data loss is just the latest, and probably the most dramatic, black eye yet for "cloud computing," since users falsely assumed that if data was "in the cloud" then it was stored with enough redundancy and fault tolerance to render such a massive data loss impossible.

Of course, most of the affected Sidekick users will probably fault the responsible service providers, and not "the cloud," but Sidekick users aren't the demographic with whom the cloud's reputation needs the most help. What probably has execs at HP, Sun, Intel, IBM, Rackspace, Amazon, Google, and the rest of the growing list of cloud infrastructure and service providers slapping their foreheads in frustration this weekend is the fact that cloud services already labor under a stigma of unreliability with potential enterprise customers.

In a number of cloud computing threads in the Ars Server Room, and in the handful of webinars that we've done on the topic in recent months, reliability is the number one knock that IT pros have against anything "cloud"-related. Part of the issue is that the IT function has a natural distrust of any systems that it doesn't own and control, especially when those systems present themselves as a black box on which IT will build something for internal use. But, anecdotally, these periodic, high-profile service disruptions seem to loom fairly large in enterprise perceptions of the cloud's reliability, which is why this latest data loss is likely to translate into a revenue loss for more than just T-Mobile and Microsoft/Danger.

It's also likely that having Microsoft's name attached to this blow-up exacerbates the damage. There's a fairly standard tradeoff between agility and reliability that's presumed when evaluating cloud services. If your developers opt to live on the bleeding edge by using new cloud services from unproven providers, they'll have to be able to tolerate some downtime; it just goes with the territory. But Microsoft's is not a new name in computing, and basic contact, calendar, and messaging aren't cutting-edge cloud services. Data loss of this scope just wasn't supposed to be possible. So it's easy to imagine that other blue-chip names will have to work extra hard in the coming months when pitching their cloud services to skeptical IT decision makers.