A Christmas Eve glitch traced to Amazon.com Inc that shuttered Netflix
for users from Canada to South America highlights the risks that
companies take when they move their datacenter operations to the cloud.
the high-profile failure - at least the third this year - may cause
some Amazon Web Services customers to consider alternatives, it is
unlikely to severely hurt a fast-growing business for the
cloud-computing pioneer that got into the sector in 2006 and has
historically experienced few outages.
"The benefits still outweigh the risks," said Global Equities Research analyst Trip Chowdhry.
"When it comes to the cloud, Amazon has got it right."
latest service failure comes at a critical time for Amazon, which is
betting that AWS can become a significant profit generator even if the
economy continues to stagnate. Moreover, it is increasingly targeting
larger corporate clients that have traditionally shied away from moving
critical applications onto AWS.
AWS, which Amazon started more
than six years ago, provides data storage, computing power and other
technology services from remote locations that group thousands of
servers across areas than can span whole football fields. Their early
investment made it a pioneer in what is now known as cloud computing.
said last month at an Amazon conference in Las Vegas they could
envision the division, which lists Pinterest, Shazam and Spotify among
its fast-growing clients, becoming its biggest business, outpacing even
its online retail juggernaut.
Evercore analyst Ken Sena expects AWS revenue to jump 45 percent a year, from about $2 billion this year to $20 billion in 2018.
service has boomed because it is cheap, relatively easy to use, and can
be shut off, scaled back or ramped up quickly depending on companies'
needs. As the longest-running player in the game, Amazon now boasts the
widest array of datacenter products and services, plus a broader stable
of clients than rivals like Google Inc , Rackspace Inc and Salesforce.com Inc .
such as the one that took down Netflix and other websites on the eve of
one of the biggest U.S. holidays are part and parcel of the nascent
business, analysts say. Moreover, outages have been a problem long
before the age of cloud computing, with glitches within corporate
datacenters and telecommunications hubs triggering myriad service
Coming soon: Post-mortem
service failure comes months after two high-profile outages that hit
Netflix and other popular websites such as photo-sharing service
Instagram and Pinterest. Industry executives, however, say its downtimes
tend to attract more attention because of its outsized market
Netflix - which CEO Reed Hastings said relies on AWS
for 95 percent of its datacenter needs - would not comment on whether
they were pondering alternatives. Analysts say the video streaming giant
is unlikely to try a large-scale switch, partly because all cloud
providers experience outages.
"Despite a steady stream of these
service outages, the demand for cloud services offered by AWS, Google,
etc. continues to escalate because these services are still reliable
enough to satisfy customer expectations," said Jeff Kaplan, managing
director of consultancy ThinkStrategies Inc.
"They offer cost-savings and elasticities that are too attractive for companies to ignore."
"Netflix and other organizations which rely on AWS will have to
reexamine how they configure their services and allocate their service
requirements across multiple providers to mitigate over-dependency and
AWS spokeswoman Rena Lunak said the outage was traced to a
problem affecting customers at its oldest data center, run out of
northern Virginia, which was linked also to the June failure.
latest glitch involved a service known as Elastic Load Balancing, which
automatically allocates incoming Web traffic across multiple servers in
order to boost the performance of a website. She declined to provide
further details about the outage, saying the company would be publishing
a full post-mortem within days.
AWS has traditionally been used
by start-up tech companies and smaller businesses that anticipate rapid
growth in online traffic but are unwilling or unable to shell out on IT
equipment and management upfront.
The company has more recently
started winning more and more business from larger corporations. It has
also set up a unit that caters to government agencies.
Regardless, Amazon's clientele would do well not to put all their eggs in one basket, analysts say.
outages do occur, but they are not common enough to cause users of
these services to abandon today's Cloud service providers at significant
rates. In fact, every major Cloud service provider has experienced
outages," Kaplan said.
"Therefore, organizations that rely on
these services are putting backup and recovery systems and protocols in
place to mitigate the risks of future outages."
Copyright Thomson Reuters 2012