Apps & Software

Amazon Web Services Reputation Badly Damaged By Outage

The cloud computing services of America’s largest tech companies are supposed to be operational 99.99999% of the time. The claim is considered a competitive advantage in one of tech’s most competitive sectors. Amazon Web Services, the wildly successful division of Amazon.com Inc (NASDAQ: AMZN) and the largest provider of cloud services, went down yesterday. In some parts of the country, it was down for several hours and affected what is likely to have been thousands of customers. The problem battered AWS’s reputation and left open the door for competitors like Microsoft Corporation (NASDAQ: MSFT

) to take some of its business.

AWS has a market share of about 33% in the global cloud market. It is followed by Microsoft Azure at 19% and Google Cloud at 7%. In the third quarter, AWS posted revenue of $11.6 billion and operating income of $3.5 billion. That was against Amazon.com Inc’s total revenue of $96.1 billion, and operating income of $6.2 billion. It is easy to see how critical AWS is to the parent’s bottom line.

“Reliability” is one of the three hallmarks of AWS that the company pitches. The other two are “flexibility”, and “scalability”. Without the first, the other two don’t matter.  Competitors are already in the market with claims their reliability is better.