"To the cloud" is wonderful for an ad but the idea of the cloud is as nebulous as its feature set. It covers everything from Software as a Service (SaaS) to Infrastructure as a Service (IaaS). The cloud is distributed but even the cloud can be a single point of failure.
Many look at the cloud as a large networked collection of computational and storage nodes. Distributing applications and services across the network can provide more performance as well as a more reliable system because of redundancies. These are the positive aspects of using the cloud. Other advantages include the ability to contract for these services and then manage them directly.
The other view of the cloud are individual users of cloud-based services. This includes everything from storage and backup sites to photo and music storage sites. It even includes MMOGs (massively multiplayer online game).
These services are tend to be large and potentially robust but they are a single point of failure for users. Take Sony's Playstation Network (PSN) as an example. It has been down a number of times essentially preventing millions of users from playing games during those times. The outages tended to be infrequent, unintended and transient. Still, there was nothing users could do except do something other than using PSN.
Sony's occasional woes are not unique. Other cloud services have had these types of outages. The big problem is that alternatives are hard to come by. True, playing another game or doing some other activity is easy but if the intent is to play your favorite MMOG then there is no alternative.
Storing data on the cloud is handy because it is often accessible from a range of devices from PCs to tablets to smartphones. Transient problems are an issue but since users usually have full access to the data they can store some or all of it locally. The problem arises if the service goes away. This can happen for a variety of reasons. Companies can go out of business or be forced out. Megaupload ran afoul of the law even though tens of thousands of users were using the service in a legal fashion. Unfortunately, unless they have backups, the online data is no longer accessible and is likely to be destroyed.
Embedded developers tend to be more technically adept but I suspect many would still lose some data if these types of outages occur. The issue will hit closer to home now that more development tools are going to the cloud. This has many advantages including the ability to provide properly configured services to all comers. Keeping up to date is easier too although developers also know that it is important to maintain consistency even with respect to development tools. The latest is not always the best.
Online developers may remember to back up their work on their own systems but this can be a useless exercise if the tools necessary to do something with these files is inaccessible. In accessible tools is annoying for transient errors but it can be fatal if the tools are permanently removed from user's hands.
Disappearing tools can occur for a wide variety of reasons. Products may simply be discontinued. Companies can go out of business. Companeis can be sold and change their business plan. They can also be forced out for legal reasons.
The latter can occur for a variety of reasons such as broken laws but legal hassles with competitors are probably more likely. Just take the battle between big firms like Samsung and Apple as an example. Preventing the sale of a product because of patent or copyright issues could be fatal to companies and their customers alike.
Usually users can keep any hardware they have if these kinds of arguments arise but if a service must go away then the users often have no recourse. This is an issue all cloud users need to remember. Often the loss of a service is just an annoyance like losing a few thousand pictures. On the other hand, these problems can have catastrophic effects on careers and companies.
Your single point of failure may not be under your control depending upon how you use the cloud.