The problems for Azure Active Directory, Visual Studio Team Services, and a number of Azure and Office 365 services began at 9:09 UTC, about 7 hours ago, perhaps caused by a lightning strike at or near the San Antonio data center, or at least that's what Mary Jo Foley is hearing. The South Central US data center began having problems with its cooling system, causing a controlled shutdown of at least a portion of that data center. The effect of this is usually a ripple effect where other centers struggle to keep up with the increased demand, and that seems to be happening here as well.
The Azure Status page shows problems across the board for the South Central US data center and for VSTS, with other problems noted for AAD and the Azure Bot Service. An update was promised for 17:00 UTC, but that deadline has come and gone, and the status page has only updated the time for a new update, now 20:00 UTC.
The Office 365 Service Health page is reporting some problems as well, with the portal and SharePoint Online. Here at OnMSFT, we had a Flow go down for a bit, but it seems to be back up now, but Planner and Teams have continued to perform well through the outage.
We'll keep you posted on the outage and its resolution, for now, it looks like this may be an ongoing problem throughout the day.
UPDATE: This just in from the Twitter account of Alex Simons, Director of PM, Microsoft Identity Division:
Mitigations are underway and capacity has now returned to >90% in North America and should be back to full availability very soon. We are deeply sorry for any negative impact to our customers are experiencing (2/)
— Alex Simons (@Alex_A_Simons) September 4, 2018