Concentration of cloud services

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Hundreds of companies provide cloud services, but the bulk of global supply is highly concentrated. About two-thirds are delivered by three companies: Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP). Naturally these companies typically report only major disruptions to their services, yet still they reported hundreds of performance interruptions per year in 2021 and 2022 - an average of 25 per month. In other words, even by their own account, the cloud goes down almost every day.

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How does the cloud work?

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The term ‘The Cloud’ would be more accurate as ‘the clouds’, since each provider operates multiple, discrete, regional services within it. Each region comprises a group of geographically dispersed data centers sharing a common network and software infrastructure.

The cloud which supplies an individual corporate user’s cloud services is specified in their cloud services contract. A region is subdivided into zones. These are served by data centers located within the geographical region. These data centers are typically located within 100 kilometers of each other, and provide geographical diversification within the region.

The regions’ physical and programming infrastructure are distinct and different. In the vast majority of cases, this separation limits the impact of cloud degradation and outage events to individual regions for limited durations of time. The division of regions into zones contains the impact of many physical events, such as an air-conditioning failure, to a single zone.

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Amazon AWS outage June 13, 2023

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That’s small comfort for businesses who are reliant on a zone which ceases to function for a time, or suffers a service degradation. For example, On June 13, 2023 Amazon Web Services (AWS), the leading cloud service provider, experienced a significant downtime incident in its US-EAST-1 region. It was widely reported in the mainstream media. Thousands of users were affected by the three-hour outage. Hundreds of businesses were effectively shut down during the period. Those that rely on the internet for all their transactions simply lost all the business that would have come their way in that period - and some customers may never return.

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Understanding the risk of cloud downtime is the first step in making sure it doesn’t bring your business to a costly halt. This post is the second in a series about managing cloud outage risks in the Digital Supply Chain. You can read more about it in the Parametrix report revealing the details of cloud downtime among the three major providers - Amazon Web Services, Google Cloud, and Microsoft Azure.