this isn't a bad thing whatsoever... it was inevitable.
virtualization is the natural progression of technology, that's undeniable, and this is the logical next step for Microsoft in order to keep up with virtual application powerhouses like Google.
think about it... 15 years ago, the user experience was about 90% local and 10% internet, we have gone far past the point of 50/50 and now the majority of a user's time is spent virtually. considering microsoft built themselves on the local user experience, this is a no brainer.
i really do not think anyone who is not a professional in this field should comment, because if you knew anything you would know this is far more secure. there are not people who manually sift through customer data, that would be too cumbersome, and there are security policies that prevent any one person from accessing and exploiting sensitive data like people have suggested.
microsoft has the money and the expert knowledge to store information safely, unlike a typical PC user, even at the last level of security (physical access). also, considering the current state of the virtual user experience as well as the trend that will continue to carry is further in that direction, it is more secure to have customer data stay within a contained private network, separate from the internet by firewalls, with only the information needed to run the client app being sent over the internet (encrypted as it might be)
also, enterprises dont just hand over information to the government. it is sensitive and private, unless the government had specific need for it and legally forced the company, most would err on the side of the customer... being buddy-buddy with the government doesnt really help their business.
interesting side fact, i spent my highschool years in the town where that datacenter is built.
