How Amazon’s Cloud Failure Could Affect Consumer Behavior

Last week the cloud computing world was shaken down to its foundation by the days-long outage of Amazon Web Services. The  reach of the outage was enormous, especially for a company has been seen as the bluest of blue chips in the cloud-platform space, and no doubt many with products on the previously solid foundation of AWS are re-evaluating their cloud architectures to avoid these types of disruptions in the future. But it’s not just the large enterprises with cause for concern: Consumers, too could come to doubt the reliability of cloud-based storage and services in the wake of last week’s events.

Up to this point, the AWS situation has been viewed through the prism of technology vendors or enterprise CIOs — not surprising, since AWS is a suite of products for those who utilize public clouds as a foundation for their own web service or as portion of an enterprise IT architecture. But many many consumer-grade web services, including Quora and Foursquare, were also knocked offline, and there’s a possibility some may question the wisdom of using cloud offerings for storing their own personal data — particularly in light of the news that some of the data in the affected zones may have been lost forever.

Many purists bemoan the fact that the term “cloud” has become a catch all for anything web; certainly, it seems increasingly slapped onto anything web-related today, because of the sexiness and marketing cache attached to the word. However, there’s no arguing that real cloud-based architectures are increasingly beneath many of the consumer services we use today, be it Facebook, Gmail or Quora. As a result of the AWS outage, the cloud “brand” may have lost a bit of its shine this past week for consumers.

But it’s not just Amazon shouldering this problem. The outage and resulting impact on sites is the latest in a long line of high-profile cloud outages. Between the Amazon problem (and news of loss of data), the massive breach of Playstation Network and other recent high-profile web-service failures such as that which happened to Gmail (and this week’s limited failure of Yahoo mail), or outages at Tumblr and WordPress (see disclosure), it’s possible that the collective tarnish of the consumer web-services market could result in some users ultimately “opting-out” of consumer-cloud services. Others may start asking their providers about ways to ensure the safety of their information. And some may choose to simply not adopt new cloud-based offerings, or de-emphasize those that they do use.

In many ways we’re at a critical point for the consumer cloud. The high volume of failures of late is no doubt beginning to resonate in the consumer’s mind at the same time Amazon just launch its Cloud Drive and Apple is getting close to its iCloud rollout (or whatever it calls its cloud music service); the industry would be wise as a collective whole to figure out ways to advise consumers to manage their data, as well as prove it’s taking responsibility by creating more stable architectures that don’t fail in the first place.

What will this “collective” action look like? Who knows. Maybe it’s simple industry self-regulation in the form of the big providers jointly stating how they will strive to avoid data loss and service downtime through a variety of measured steps. Maybe an industry compliance body is created.

No matter what the industry does, it needs to act before consumers themselves decide this cloud thing isn’t worth it.

DisclosureWordPress is backed by True Ventures, a venture capital firm that is an investor in the parent company of this blog, Giga Omni Media. Om Malik, founder of Giga Omni Media, is also a venture partner at True.

Question of the week

Will outages from AWS and other services create a consumer crisis in confidence?
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Michael Wolf

Chief Analyst NextMarket Insights

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