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Yes, Microsoft certainly has a history of this. Mostly things that they came to the market late with and experienced almost no market success.Microsoft also has a huge history of "Going all in" then a few years later "Pulling completely out". The Kin, the Zune etc. It's really hard these days to bet on something radical with them because you don't know if it's just going to be abandoned in a heart beat later, no matter WHAT they say up front (Or tell their stock owners). Google is no better about that either...
Without a doubt, the upload speeds are the things that make cloud based "storage" a slow-go or no-go for many people. As far as the cloud goes and using it, I wouldn't say it's failing across the board. Many people use services like yahoo, gmail or hotmail for email and have no local copies of that data. (I'm one of them). And I'm using sync features of Google Chrome to store all of my bookmarks in the cloud without having copies of them locally. I've started using the Amazon cloud for my MP3 purchases and playback my music from the Amazon MP3 cloud player more than anything else. My downloads go immediately to my cloud drive and from there, I can (and do) download to my home server for storage as well. < - But my point, is that I"m using the cloud.....The cloud WAS the new bandwagon a few years ago and so far most people are pretty much failing at it. There may actually not be anything there, or it may take another decade to slowly transition over. (Maybe not till 100Mbps or faster fiber to the door for 90% of the world exists)