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Plenty has been written about last week’s disruption of Amazon’s Web Services (AWS) which took hundreds of organizations offline, including many rapidly growing start-ups, and about evolving aspects of enterprise operations. The best I’ve read summarizing the questions raised and lessons to be learned as a result of the AWS outage was by my friend Phil Wainewright.

After suggesting at the beginning of last week that recent issues surrounding Google (GOOG) could derail the rapid growth of Cloud Computing services, it is obvious that Amazon’s (AMZN) problems must be added to the list of sobering events which will certainly cause many entrepreneurs and enterprise decision-makers alike to re-think their Cloud strategies and deployment tactics.

Google’s support issues, combined with Amazon’s service availability problems, clearly make real two of the three greatest fears which IT and business decision-makers face when considering the widening array of Cloud alternatives. The third primal fear regarding Cloud services is the potential for a serious security infraction. To date, Cloud providers have outperformed many organizations in fending off security threats. But a well-publicized violation would raise serious concerns about the short-term viability of Cloud services for mission-critical, core applications and business processes.

I say ’short-term’ because we all have short memories, or maybe it is fairer to say higher tolerance levels than we realize when it comes to our fears regarding web-based services. For instance, Salesforce.com (CRM) has only seen greater growth since it suffered a series of serious service disruptions in 2006. And it has not seen any appreciable service abandonment as a result of subsequent outages more recently. Another example is NaviSite (NAVI) which suffered an outage that lasted nearly a week in 2007 and was recently acquired by Time Warner Cable (TWC) for $230 million.

As I said back in December 2007, “Failure Doesn’t Matter”.

However, if these problems persist, not only will Amazon’s credibility and competitive position be compromised, but the commodity-services oriented aspects of the Cloud Computing business will also be set back significantly.

In the meantime, the winners (as a consequence of last week’s outage and Google’s support issues) are the established players who may not be offering bleeding edge services at the lowest available costs. Rather, they are promising more reliable services at reasonable prices. For instance, folks at IBM (IBM) timed things perfectly with their new SmartCloud services. And, Verizon (VZ) completed the acquisition of Terremark just in time to capitalize on Amazon’s problems.

There are also lots of smaller players who can win greater attention as a result of Amazon’s outage. I spoke to SmartBear in the midst of the AWS issues last week to learn more about its acquisition of AlertSite. The company was eager to discuss how its combined capabilities could help organizations mitigate the risks associated with Cloud availability and performance issues.

Hopefully, Amazon and other Cloud service providers will learn important lessons from last week’s outage, which will lead to improved service quality going forward. In the meantime, this event will make corporate decision-makers more aware of the tough questions they must ask the Cloud providers about their services and the standards they should set for their performance.

As I suggested a year ago, I also expect last week’s outage to reset the competitive landscape and the criteria for success, moving the advantage from the price leaders to the quality service providers.

Disclosure: I have done consulting work with Salesforce.com, NaviSite, IBM and Verizon.

Source: Cloud Parade Rained on by Amazon Outage