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Why Amazon Outage Was Bad News for Netflix but Good News for You

by CB3 Team - December 31, 2012 -

Too bad for Netflix and especially Amazon Web Services that this Christmas turned into one one very dour holiday for both. Both became the subject of headlines screeching about a hours-long AWS outage that knocked Netflix down and kept lots of its subscribers from cozying up to a Christmas Eve movie.

Netflix delivers its service through the Amazon cloud. And it seems almost inconceivable that a two companies that big and practiced at conducting business over the cloud could have suffered a failure that, well, wasn’t quite catastrophic but still had to shake the credibility of both right down to the core.

Yeah, it was bad for them. But it was also good for you — if you’ve got a business depending on the cloud.

First it amounted to a good dose of reality. Consider the point made by the E-Commerce Times in its follow up on the outage.

To the uninitiated, the news that a cloud service could fail must have come as a shock, Matt Eventoff, principal with Princeton Public Speaking, told the E-Commerce Times. “I think most consumers and possibly even some businesses had the idea that the cloud was a 100 percent failsafe option that guaranteed 24-7 Internet coverage,” he said. “Cloud providers have never said that, of course, but that is the perception many people have of the cloud.”…

What the outage could do is cause business users to rethink how they access the cloud and make plans for redundancy, said Daniel M. Ladik, associate professor of marketing at Seton Hall University.

Meanwhile MSN Money used the outage to bring some glad tidings on this front — the mounting competition to the presently dominating position of AWS in the marketplace. An open-source alternative to AWS called OpenStack is gaining momentum. And a number of AWS rivals are using OpenStack to fuel their own challenges. As the story on MSN Money observed:

Amazon’s dominant share in the cloud is shrinking, while that of OpenStack is growing. Red Hat (RHT) has focused its own Open Shift platform on OpenStack. Rackspace (RAX), the original sponsor, has more OpenStack experts than anyone and has finally shifted its own operations to it. Dell (DELL) and Hewlett-Packard (HPQ) are both building global cloud networks based on OpenStack. So are most major telcos. IBM (IBM) is a platinum sponsor of the code base.

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