A new month and another outage for Microsoft's Office 365 cloud service. This time it had company as Hotmail and SkyDrive were also downed by the same DNS (Domain Name System) issue.

Luckily for Europe, outages started in the middle of last night when most of us were tucked up in bed – 4am GMT and lasted for around three-and-a-half hours – but users in Asia Pacific and North America were hit in the middle and at the end of their respective days.

On the official Office365 Twitter feed, Microsoft said: "Preliminary root cause suggests a DNS issue, though we're still working hard to restore."

The service was back up and running again several hours ago and Microsoft thanked customers for their patience. This is the second major outage since Office 365 launched in late June as the successor to BPOS.

Microsoft says it has a financially backed SLA for its cloud services and last month gave BPOS customers a 25 per cent credit note on any future invoices following an outage.

Hotmail, Skydrive and other Live properties were also out of service, the Inside Windows Live blog confirmed.

"We are working on propagating the DNS configuration changes and so it will take some time to restore service to everyone. Again we appreciate your patience," the firm said.

In a statement sent to El Reg, Microsoft said DNS issues had caused service degradation for "multiple services", adding "we are conducting a review of the incident". ®