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Microsoft CEO Steve Ballmer characterised the recent Sidekick data loss episode as “not good”, and said he believes all the data will be recovered, but added that Microsoft will have to be more forthcoming in explaining to enterprise customers why a similar situation won’t occur with Microsoft’s online services.

“It is something we are going to have to address and explain to customers our method and process and quality approach and what went wrong in that case and how we are making sure that it does not happen again,” Ballmer said.

Ballmer spent part of his morning keynote at a Sharepoint conference explaining how Microsoft plans to push the cloud version of SharePoint and create options for users to run their applications and store data in the cloud.

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He said he would have to earn back the trust of Sidekick users, some of whom have reportedly filed lawsuits. 

“Non-Sidekick users, we are not earning their trust back but I think people are going to say, ‘Hey, look, show me what you are doing to insure this does not happen to me,’ ” Ballmer said.

“People will want to know, is our approach different for SharePoint Online, is our approach different for the enterprise infrastructure. I think we have good answers, but I know we are going to continue to upgrade our processes and have to upgrade how we talk about this stuff, because we are going to get more questions.”

Ballmer was quick to correct a reference to lost data went asked about the episode.

“It is not clear there was data loss,” he said. “Initially we thought there was. We are working hard to get all the users’s data back in the Sidekick case. I think we believe we will get all user data back at this juncture.”

But Ballmer knows the questions are coming about future services.

“It is one of the things that we highlight in competitive battles; that our competitors have had a whole lot of outages in their services. We do highlight it [when they have a problem],” he said.

“I'm sure our competitors will highlight this outage,” he said.

But Ballmer is already formulating answers that he is for the most part holding close to his vest for now.

“I think we have good answers in terms of what we are doing for the development process and the service operations processes to make sure this does not occur [with Microsoft’s online services],” he said.

There, the stakes are much higher.

SharePoint Online, part of its Business Productivity Online Suite (BPOS), has one million users. The majority of those customers use the service to store data online as it does not yet have full-feature parity with the enterprise version of SharePoint Server. In addition, Exchange Online is another data-intensive application within BPOS, a set of service run by Microsoft. Also, Microsoft next year plans to offer Office Web Applications, online versions of the popular productivity applications, that will feature SharePoint as their back-end data storage infrastructure.

BPOS, however is not run on the same infrastructure that hosted Sidekick, which was operated by Microsoft’s Danger subsidiary and was not running on Microsoft software or its Azure cloud platform.

Customer confidence in online services generally has been taking a flogging lately. Google has had a number of notable outages, including six since March 2009. Of course, the Sidekick outage resulted in lost data at first. Microsoft has begun to recover some of that data, cand the process is ongoing.