Amazon (NASDAQ:AMZN) is facing jittery and unsatisfied customers after its cloud computing platform Amazon Web Services suffered a blackout for several hours last Friday as a result of thunderstorms in Virginia where its data centers are located. Amazon blamed the outage on a generator failure at one of its multiple data centers. Bugs discovered later in Elastic Load Balancing and Relational Database Servers (RDS) systems accentuated the problem. ((Amazon Blames Power, Generator Failure for Outage, PC))
Netflix, Instagram, Pinterest and other customers who use this platform faced interruptions in their services. Frustrated CIO’s of affected companies complained that no communication or support had been forthcoming from Amazon over the expected duration of the disruption or their specific computing services. An Amazon spokesperson also declined to comment on whether more proactive support would be made available in future, as reported by the WSJ. ((Amazon’s Cloud: Take It Or Leave It, WSJ))
CIO’s of potential customers are keeping their options open. They would like commitment to greater transparency during future outages before striking a deal since they have their own customers and reputations to protect. They point out that the fault tolerance and resilience of the cloud are its biggest attractions. These CIO’s expressed readiness to go to a rival service provider in case Amazon doesn’t agree to these conditions.
Amazon’s present system of signing up cloud computing contracts leaves little room for customers to negotiate or insert new clauses and the company is well-known for not budging on its terms of service.
We currently have a $222 Trefis price estimate for Amazon which stands near its market price. Amazon’s main rivals in the cloud computing space include IBM (NASDAQ:IBM), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), Oracle (NASDAQ:ORCL), Salesforce.com (NASDAQ:CRM) and VMWare (NASDAQ:VMW).