Things Fall Apart: Amazon’s Epic Cloud Failure Reveals Shortsightedness by Some Other Well-Known Tech Companies

4/22/11Follow @curtwoodward

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based in San Francisco, sells ads and paid subscriptions, and is owned by media giant Conde Nast, which reportedly has been talking to investors about buying a stake at a potential $200 million valuation. “They can’t blame it on the money,” Sanchez says.

“People are quick to point fingers at Amazon or whoever their cloud provider is—’They’re down, and they took us with them.’ You see that on Twitter, if you look, from dozens and dozens of brand-name sites,” Sanchez says. “At the end of the day, that’s true. You’re down because of Amazon. But in reality, your whole business relies on being up. And there’s 100 different ways that they could have avoided having to say, ‘We’re down because of Amazon.’”

Whenever Amazon gets its service back together, it’s a reasonable bet that alternate providers will see some new customers. At the very least, Amazon-dependent companies will probably switch to or add computing power in other areas of Amazon’s network.

But it’s unlikely that Amazon’s position in the cloud-computing sector will weaken in a major way—even companies that were crippled for hours by the outage were pretty deferential, like Palo Alto, CA-based Quora’s error-page message that said “We’d point fingers, but we wouldn’t be where we are today without EC2,” the shorthand for Amazon’s Elastic Compute Cloud.

As Palo Alto entrepreneur Semil Shah noted on Twitter, “Perhaps the company most vital to Silicon Valley startups isn’t even located here—it’s in Seattle.”

“In a way, it’s kind of amazing that people trust EC2 so much, and EC2′s record of being available for so long without any major failure,” Subramanyan says. “I think it’s actually pretty amazing that these companies have failed to diversify their vendors.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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