Microsoft has tried to distance its fledgling cloud services from its newly acquired Danger smartphone division after an unknown number of US customers lost data due to a server failure.
The company said the data loss was a result of a server failure in a datacentre it acquired when it bought Danger that had not been updated to run on Microsoft technology.
The loss of customer data is a setback for Microsoft as it seeks to convince corporate customers it has built secure and reliable datacentres for cloud services, said the Financial Times.
Microsoft has not said how many users of the Danger Sidekick smartphones were affected by the failure, but about one million of the devices have been sold since they were introduced in 2003.
Danger was acquired by Microsoft 18 months ago as part of plans to bolster the company's position in the smartphone market.
T-Mobile, which provides the network for the Sidekick smartphones, told users at the weekend at that personal data no longer on their devices was almost certainly lost.
Microsoft said its engineers were trying to recover data and there was a better chance for customers who did not remove batteries or allow them to run down.