They're a manageable failure if the customers have recovery tools, workarounds, alternate service-provision points or other options in case the service goes down – but only if the service provider is quick to admit the failure and give customers whatever information it has on the problem.
Both failover resources and immediate, detailed updates on service levels are routine parts of most outsourcing contracts, but are vanishingly rare in the U.S.-based SAAS and cloud markets.
That lack of contingency planning – more than security, cost or ignorance – is the biggest holdup in the widespread adoption of cloud-based resources by enterprises.
Business-unit managers with credit cards keep pumping money into the market. Behind the scenes IT is either unprepared or fuming, because they're not being allowed to do their jobs by providing backups and failsafes that can pull business managers out of a tough place when some new IT service they hired goes belly up, taking corporate data or wasting hours of time for end users while everyone stands around waiting for the cloud to come back online.
Analysts say that gap is because of the immaturity of the cloud market – which is ramping up in both reliability and backup options as it becomes more established and more credible.
Microsoft's BPOS outage – especially frequent outages – don't help.
Not admitting the problem or paying customers the courtesy of explaining what it was until long after it's fixed show an immaturity in the vendor, not the cloud technology.
No matter how close the experience is to your current office suite, it's not a good idea to go with an immature service provider and immature service as a replacement for anything as critical to the hour-to-hour process of conducting business as email.
Even though the outage hit BPOS, not Microsoft's newer service, the ultimate hit in credibility won't be to BPOS, it will be to Microsoft itself and, especially, Office365.