Perils of the Mobile Cloud

As consumers store addresses, e-mail, and other data from their mobile phones via online services, the potential for lost data is rising

By Olga Kharif

Editor's Note: This is the second in a two-part series about the potential hazards of storing personal and business data with online services. The first article, published on Oct. 18, 2009, deals with small companies that use Web-based e-mail services.

In early October, Long Beach (Calif.) communications manager Kimiko Martinez discovered that her T-Mobile Sidekick phone had lost her 1,200 address-book contacts, photos dating back five years, and three years' worth of financial information.

The data was stored on Microsoft's Sidekick service. In early October, T-Mobile said it lost the data of thousands of users of its Sidekick smartphone after a computer problem at Microsoft (MSFT). Microsoft says it's working to restore the data.

The glitch gave Martinez more than a few headaches. Since losing her calendar entries, she's missed three meetings. Many phone numbers are still AWOL. "I just have to start all over again," she says. There's another upshot: Martinez, 31, says she's shopping for a new smartphone—and another service provider.

Outages at Hotmail, Gmail

As the computer industry creates hardware devices, Web sites, and mobile-phone software that increasingly rely on data stored on remote servers, the potential for waylaid data is becoming a more common problem as well.

Both Microsoft's Hotmail and Google's (GOOG) Gmail have experienced outages this year. Last year, some users had trouble gaining access to Apple's (AAPL) MobileMe service, which syncs up Apple owners' e-mail, contacts, and calendars across Macs and iPhones. BlackBerry maker Research In Motion (RIMM) has experienced service outages as well. "I wouldn't be surprised to hear of another, similar snafu with another vendor," says Shaw Wu, a senior analyst with Kaufman Bros. who covers Apple, RIM, and other hardware vendors.

Cloud computing services for backing up smartphone data may be especially vulnerable. For one, the market is populated with green startups that could go out of business and take users' data with them, says Charles Fitzgerald, a vice-president at Decho, an EMC (EMC) unit that provides PC and mobile storage services to Vodafone Group (VOD) and China Telecom. "There are a lot of fly-by-night players in this space," says Fitzgerald, who spent 19 years at Microsoft and left last year.

"Not All Clouds Are Equal"

Consumers may also have trouble retrieving data over slower wireless networks or backing up data over the air in areas with spotty connectivity. That means saving SMS messages, photos, and address book entries can be prone to delays and outages. Vendors' backup policies for wireless devices can also vary widely. "Not all clouds are created equal," says Fabrizio Capobianco, CEO of Funambol, which makes software that helps Vodafone and other carriers back up users' data.

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