This is nothing short of a complete and utter disaster. The only way this could have been worse for users is if after losing all of your data, Microsoft servers issued a self destruct code on the Sidekick causing it to blow up and burn down your house.
"T-Mobile and Danger, the Microsoft-owned subsidiary that makes the Sidekick, has just announced that they've likely lost all user data that was being stored on Microsoft’s servers due to a server failure."
How in the world could Microsoft allow this to happen? They have owned Danger now for 18 months. I have been involved in over a dozen acquisitions in my career and one of the things we always ask the IT department is "Do you perform regular backups of all company infrastructure and data?" You'd think that would be a key question Microsoft would have asked given Danger stores all of the Sidekick users data on their servers. Unlike Windows Mobile, there is no PC side sync possibility nor programs to back your data up to a storage card.
Makes me wonder about the reliability of things like Live Mesh (still in beta) and My Phone. What is more disturbing is the deafening silence from Microsoft and Danger on this. When Google has a cloud computing fail, usually centered around GMail, they are very quick to update the public on the status and once resolved, the cause. Microsoft has instead chose to let T-Mobile be the primary point of defense even though T-Mo doesn't do much but sell the devices. When RIM has an outage, the carriers don't get involved. RIM steps up to the plate by acknowledging the problem and gives a status update.
And yes, this is Microsoft's fault.
When are companies going to learn? Silence is not golden in these cases. Evernote had a server meltdown for a chunk of its users a few weeks ago when the 3.5 Windows update came out. Total silence from Evernote. Affected users were left to figure out what was going on in the user forums. No data was lost, but it was being held hostage on their servers for nearly three days. Evernote lost a lot of respect from me when that happened. Not the service issue, the lack of any communication. Microsoft - is your PR person on vacation?