The Sidekick data loss debacle stands tall as one of the most extreme IT failures by a major corporation in recent memory. Thankfully the data has been recovered, but that still doesn't mean this story has a happy ending. It now looks like Microsoft could be out a big chunk of change as a result of this whole error. If TechCrunch is correct, we're talking something in the neighborhood of $700,000 a day.

A 'reliable' source has informed TechCrunch that Danger's contract with T-Mobile stipulated that the company would pay damages if they allowed a service downtime of more than 99.5%. When Microsoft bought Danger, they gained that responsibility. We don't know the exact details of the contract, but TechCrunch's source says that, back when the Sidekick user base was 800,000 people, the penalty was 700 grand per day.

Since the amount owed grows with the number of people inconvenienced, the fee today is almost certain to be much higher. And that's just the cost paid for a loss of service, we don't know what (if anything) Microsoft was obligated to pay in the event of catastrophic data loss. This could end up costing the software giant millions.