Red faces at Microsoft as server failure turns smartphone dumb

Not so smart after all. Microsoft and T-Mobile executives have been humiliated by their Sidekick smartphone, which first lost internet access and then deleted its customers' numbers, photos and other important data.

The two companies had to apologise yesterday after data held on customers' Sidekick phones was lost as a result of a server failure. As well as being hugely embarrassing, the failure will undermine confidence in "cloud computing", which many in the technology sector believe is set to be the next big development.

Thousands of Sidekick customers in the US first lost access to their data services on Friday. While users were able to use the device to call and text as normal, they had no access to the internet, email or instant messaging. Many then reset their phones, thinking it would help, only to see their personal information had then been completely wiped.

In a joint statement, T-Mobile and Microsoft said engineers had made "significant progress" in restoring the service to its customers over the weekend, but they still faced losing data.

The groups said "the likelihood of a successful outcome [in recovering data] is extremely low," although it added later that "the prospects of recovering some lost content may now be possible".

Microsoft warned customers not to remove the battery from the device or let it run down as this could result in a permanent loss of data. T-Mobile, meanwhile, has offered a $100 "customer appreciation card" plus a free month of data services to victims of data loss.

The server outage is understood to have occurred at the data centres run by Danger, the company that makes the Sidekick and which Microsoft bought in February last year. The company was still investigating what caused the crash yesterday.

The saga will severely dent the credibility of cloud computing, where customers store their information on remote servers rather than on their own devices. Microsoft runs other cloud computing platforms, including Windows Azure and Office Web Apps. These are understood to be unaffected, as the technology is separate. Mobile expert Azita Arvani warned the outage had put "a huge black eye on the cloud computing services, in general".

Companies including Google and IBM are also pushing cloud computing as a cost-effective way to store data. "If you can't trust Microsoft, who else can you trust?" Ms Arvani said.

The affair also comes just a week after Microsoft's big push into the global smartphone market around the world. The group announced the launch of 30 phones in 20 countries, although none were running on cloud technology.