Microsoft has hyped up the cloud server features that will be used by the Xbox One, including unlimited cloud storage for save games and other items. It will also be used by game developers to help them create more advanced AI and larger game worlds. However, it looks like there's going to be a downside for using the cloud more extensively.
An article on IGameResponsibly, reporting from this week's GDC Next conference in Los Angeles, quotes Microsoft's Xbox Live lead program manager John Bruno as saying:
Once in a while, rather frequently actually, the host OS will require an update, meaning the physical machine is going to get rebooted, whether your code is running or not. That’s a problematic thing for a game, and is oftentimes is in the middle of a multiplayer session. We’ve worked very hard to overcome that, but that’s not to say it’s going to be a reality in every case.
At least two Xbox One games will be using Microsoft's cloud servers extensively: the launch title "Forza Motorsport 5" and "Titanfall", which is scheduled for release in March 2014. It would certainly be an issue if Microsoft pushed a cloud server update that would interrupt a multiplayer session for both games.
Bruno also stated during the conference session that the cloud platform for the Xbox One made for game developers is called Xbox Live Compute. It's based on Windows Azure but has been modified for the Xbox One console and has been in development for 18 months.