I'll second everything Mike said - and take the recommendation one step further:
There should be a mechanism to allow contacts to pass through the step and continue with the campaign/program if the cloud connector fails. It should be configurable on the cloud connector step - with a timeout, so I can say "if these contacts are not processed within one hour, just send them on to the next step."
The reason for this is that cloud connector steps of relatively low importance (like changing text to title case) are sometimes put in programs that are mission-critical such as routing and notification programs. In the case Mike describes above, I would way rather have 100 non-normalized leads sent to my sales team than have 100 leads stuck in a cloud connector step and never getting to my sales team at all. So when configuring the program, you could set it up so that if the cloud connector doesn't return contacts within an hour, just move them on through the program and synch with CRM anyway.