I was sitting in the dentist's chair getting my teeth drilled, while the technician complained about her now-worthless Sidekick. With no way to access her contact lists, she couldn't get in touch with her family due to arrive in DC for a reunion, and had to rely on the frequently failing device as a simple inbound line for family members to contact her. When that failed, she had to use a payphone.

It was a pretty sad story, and thousands of users were faced with a similar communication breakdown...for more than a week.

People threaten to sue Google when Gmail goes down for mere hours. But the poor Sidekick customers lost use of their phones, lost their personal data (in some cases permanently), and even lost the ability to turn off or restart their devices for upwards of nine days.

Microsoft and T-Mobile claim to have finally restored much of the lost data, and now offer a recovery tool on the T-Mobile site, but the incident was just too tremendous to simply walk away from. The whole concept of Web-based, shared, and distributed cloud services now has a huge black mark smeared across it, even though the Sidekick's contact, calendar, photo, and info sync only vaguely constitute a "cloud" service.

The resulting cloud doubt was never as clearly portrayed as it was by ABC News columnist Michael Malone, who said, "What counts is that we never really ever trust the cloud again."

But "the cloud" -- the marketing buzzword -- represents much of what the computer industry has been working toward for years: small, fast, and lightweight consumer end devices relying heavily on their persistent connection to a network (whichever one that may be) to provide information, storage, and processing on demand.

It's not something one can particularly trust or distrust.

I liken it to home PC security. You can't simply say the whole Internet is untrustworthy because it contains viruses, scams, and information of dubious authenticity. You take the good with the bad, protect yourself, and tread lightly.

There's only so much your antivirus software can do to protect you if you're recklessly clicking through everything, installing whatever fake plug-ins you're told to, and voluntarily submitting personal information when asked. Similarly, if you're uploading information to a single hosting service without backing it up somewhere, you're putting yourself at risk.

Unfortunately, Sidekicks are a risk.

Regarding the fiasco, Microsoft CEO Steve Ballmer recently said, "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 ensure this does not happen to me.'"

The devices have been compared to thin clients, where there is no mechanism in place for a client-side backup of all the data stored on the Danger/Microsoft servers, so users are given only minimal control over their data.

This degree of control is one of the critical elements in establishing confidence in cloud-based services.

"All risk cannot be removed," said Erik Laykin, leader of the Global Electronic Discovery and Investigations group at independent financial advisory and investment bank Duff & Phelps. "After all, we are still relying on hardware and software systems, both of which can fail."

"Both organizations and individuals need to consider some factors [when] turning their data over to a third party...What are the risks we opening ourselves up to? Where is this data going to be (US, India, China)? What kind of backups and redundancies are in place? Who are the third party's subcontractors?" Laykin said.

Risk-benefit analysis, therefore, is another critical element.

"My clients are corporations and law firms, but consumers have to be aware of the risks too. For example, as an individual, I outsource my backups to online storage services like Carbonite. Do I accept that as the final solution? No. I make a physical backup because I can't always rely on my third party. Sidekicks unfortunately lack flexibility in this area."

But because we cannot rely solely on a cloud service, does that mean that ABC News was right to suggest we can't trust the cloud?

Laykin said no: "I'm getting on a plane tomorrow, and we all know the plane can drop out of the sky for a thousand different reasons. But does that mean I can never trust airlines to get me there safely? Of course not. We trust that the airline has mitigated those risks, but protect ourselves and our families with insurance in the unlikely event that something happens."

It's situations like the Sidekick data loss that could ultimately restructure the way we deal with data protection.

"For the last ten years, the insurance industry has provided coverage to mitigate data loss, which usually addresses hosting data," Laykin said. "Data insurance for individuals may not be something widely available today, but I envision policies like that being part of the average user's portfolio twenty years down the road."

Today, groups like Laykin's can assess the risks for companies looking to move their data into the cloud, but incidents like the Sidekick outage could trigger the demand for stricter regulations. "We may see a day in the future where organizations and companies like Microsoft or Google are rated on how safe and accessible their data is. Right now, it's still a brave new world in terms of third-party data management."