One of the biggest fears most users have around the cloud, along with security, is around reliability and the Microsoft problems will not help deal with those concerns.
Microsoft posted a blog post explaining that it was aware services were down between 3am and 5.30am last night and it was investigating but this is the second time in as many months that there have been problems in the four month old hosted application suite.
"We believe we have restored service for all customers at this time. We will continue our investigation into the root cause of these issues and post an update following our investigation. Again we appreciate your patience and apologize for the inconvenience," stated the blog post.
In a later update the vendor seemed to be concentrating on DNS configuration changes: "We're aware of reports including the comments posted below that some customers still are seeing issues. We are working on propagating the DNS configuration changes and so it will take some time to restore service to everyone."