Microsoft claims to have recovered the personal data lost when its Sidekick smartphone servers failed.
The company said the data loss was a result of a server failure in a datacentre it acquired when it bought smartphone business Danger.
The servers were used to store contacts, photos, calendar appointments and other personal data stored on the Sidekick phones operating on the US T-Mobile network.
Microsoft corporate vice president Roz Ho said all data will be restored and only a minority of Sidekick users are still affected, according to the BBC.
Microsoft has still not disclosed how many people were affected by the data loss, but Sidekick is believed to have around a million subscribers.
Microsoft said it has improved the overall stability of the service and installed "a more resilient back-up process" to prevent similar data losses in future.
Industry commentators said the data loss is one of the largest failings in cloud computing, but Microsoft has tried to distance its cloud services from its newly acquired Danger division.
Announcing the data loss earlier in the week, Microsoft said the Danger servers had not been updated to run on Microsoft technology.
Danger was acquired by Microsoft 18 months ago as part of plans to bolster the company's position in the smartphone market.