The Amazon Cloud Crisis

The failure of the Amazon EC2 cloud over the weekend should not have been that big a deal.

It became a big deal primarily due to Amazon's silence.

The lack of transparency made it easy for lazy journalists to do stories about how customers were re-thinking the cloud  as though Amazon and the technology were one.

They're not. Amazon is the best-known commercial cloud in the marketplace, although consumers probably didn't know that until this weekend.

Still, this should have been on Amazon's AWS blog  from the time the outage started. But it wasn't. In fact it still isn't. It's this lack of transparency that's the problem, not the cloud concept itself.

Lots of companies virtualize operating systems and abstract systems from data. There's a whole software industry aimed at enabling companies to do that – to get more value from their existing systems by tieing the resources together and running them as one unit, so crowds can get at one thing they need or huge jobs can run quickly. That's a technology concept. That will continue and grow, because it just makes sense and it provides value.

The problem is that Amazon is proving by its silence that it may not be ready to be a Big Boy services provider, as many assumed it was. Lots of companies will benefit from the failure, including IBM, Google and Microsoft. So will the web hosts working with Rackspace on OpenStack, and VMWare, which is also empowering companies to run their own clouds.

Until Amazon gives a full accounting of not only what went wrong and how it was fixed, but why we weren't told about the problem in real-time, it's going to be suspect as a service provider. That's an Amazon problem. Investors today might be wise to watch this space and tote up the damages because American stock markets were closed Friday and this is the first chance nervous owners may have to get out of the stock. You don't pay $180/share for an online store – you pay that only for a scaled tech giant you can trust.

Amazon's credibility is definitely on the line.