"The problems highlight one of the risks of relying on hosted applications providers, which offer to house software and its data for individuals and organizations."

What's with the unncessary bashing "hosted application providers"? I think it's safe to say that many more users would be affected by bugs and dead hard drives had they been running this on their personal computers, had this been a desktop application, like Frontpage.

It's a visibility thing. Millions of circuit breakers trip in homes every year. Not news. Millions of homes go dark at once? News.

Hosted apps have a risk (coordinated failure) that desktop apps generally do not. 100,000 hard drives don't all crash at once.

Also remember that it's in the interests of journalists to assume a tone of authority, to write in a way that mimics reasoned analysis: "this is part of a recent trend". It's a little gratuitous, but it's not unnecessary bashing.

This is bad news for any company trying to build trust in web hosted applications and data (such as mine). I hope they can fix it and restore the data, otherwise a lot of trust in general will be lost. Wouldn't they at least have data backups? (Does Amazon's S3 backup their data?)

This is the upshot of putting your software on the web. Word or Access bugs b0rk user data retail. The same kind of glitch in a web app is magnified because it happens wholesale: everyone is affected at once.

But I would class this with the Yahoo/Google DDoS blackouts and the eBay scaling blackout circa 1999. Teething problems that will soon be forgotten if they are fixed correctly.

I guess they should allow you to export your settings and take your data with you. That is a Web 2.0 rule after all.

I could see a few more episodes like this forcing Google to focus more on 'reliability' which could decrease the amount of risks they take and increase their cycle time for new products. Has to happen eventually.