Go Daddy is one of the larger online server with over 53 million domains registered and on Monday, 10 September 2012, the service crashed taking down thousands, perhaps millions of its hosted websites. This is not the first such Internet server crash, neither will it be the last. Go Daddy claims that the crash was not caused by any outside influence such as a hack. Whether it was or whether it wasn't a hack, the incident is just another in the series of incidents that point a cautionary finger at online data and service providers.
The Internet aka the Cloud is not invincible and error free. It is a hugely complicated cooperative venture and the failure of one component of some of the larger providers can have a devastating effect on those using the services. To use an analogous situation, the electricity in my house is very reliable, except when it isn't. In the past year or so, we have had total electrical failure at least once or twice. Salt River Project, the electrical supplier is a huge company, but it cannot foresee nor can it stop electrical outages. I believe the same thing goes for any online service provider. They are not immune to outages.
Those touting online storage as the ultimate solution should take note. The Internet should be treated the same way as any other hardware and software. Do not put all your eggs in one basket. Make sure you are not depending on the Internet as the sole backup for your data.