Microsoft is one of the companies targeted for data mining by the National Security Agency, but unlike some other organizations, it may be a willing participant. In addition to accessing Skype and Hotmail information, the NSA may be able to access files in Microsoft's SkyDrive cloud storage.
The NSA's PRISM program, which whistleblower Edward Snowden revealed last month to much fanfare, is a collaboration (willing or otherwise) between the NSA and a number of powerful tech companies, such as Google, Apple, Facebook and Microsoft. Under this program, the NSA can mine user data without requiring any special kind of permission, such as a warrant.
While most companies vehemently denied taking part in PRISM, documents leaked to British paper The Guardian suggest that Microsoft was more complicit than most (keep in mind, however, that The Guardian did not publish these documents, and Microsoft has been vague on the topic).
In addition to granting the NSA access to Outlook and Hotmail email, The Guardian said, Microsoft allowed the NSA to record Skype calls and access cloud storage through SkyDrive.
On its surface, SkyDrive — which will soon be renamed, following a lawsuit from British broadcasting company BSkyB — is extremely similar to Google Drive. Users get 7GB of storage, which they can employ to either create Office documents on the fly, or upload their own files. The rest of the features are old hat for cloud storage: Store and access files from any computer or most mobile devices.
In addition to apps for iOS and Android devices, SkyDrive has an official app for Windows phones and tablets. At present, most other cloud storage services don't have Windows mobile apps, which make SkyDrive a more convenient choice for Microsoft's mobile fans.
Microsoft's terms of service assure users that they own everything they upload, with one important caveat: "Anyone you have shared content with may, for free, use, save, reproduce, distribute, display, and transmit that content in connection with their use of the services and other Microsoft, or its licensees’, products and services." [See also: 13 Security and Privacy Tips for the Truly Paranoid]