For 7 hours, in December 2021, there was an internet outage. This caused a lot of damage to many companies. Who is at fault? A failure of Amazon’s cloud servers in Northern Virginia.
This incident, far from being isolated, shows the extent to which businesses and governments entrust their computing power to a small number of cloud services. Just three companies – Amazon, Microsoft and Google – control nearly two-thirds of the cloud infrastructure. According to Vili Lehdonvirta, chief expert on digital economies at the University of Oxford, this is a serious problem. He talks about cloud computing companies like some epidemiologists talk about antibiotics. These easy fixes, if used too often, can cause unexpected fatal infections.
Netflix, a major Amazon Web Services (AWS) customer, is complaining that it will struggle to operate if Amazon removed it from its servers. Even the majority of nodes on Ethereum, the decentralized blockchain network, depend on AWS. In fact, it can be said that this clearly centralized cloud services company can take any business offline.
At the same time, the big cloud service companies are hoarding money and consolidating their dominance. Amazon got 74% of its 24.8 billion dollars in revenues from AWS last year, compared to 58% en 2018. And the money keeps on flowing. As proof, research firm Gartner predicts that customers will spend $600 billion on its services by the end of 2023.
Why is the cloud so important?
You should know that to deal with dependence on technology, the most obvious solution is thestop using the “cloud” altogether. Rather, it is a return to the distributed computing that reigned in the 1990s. In those years, companies ran their own servers. But that is easier said than done. “Scaling a system that works with hundreds of millions of users is a real challenge,” Lehdonvirta said.
Also, companies don’t have much reason to avoid the cloud in the short term. After all, companies like Zoom are quickly gaining momentum. these relies heavily on Amazon’s cloud servers.
Political will is also limited, Mr. Lehdonvirta said. The main cloud players are divided between the United States, where Google, Microsoft and Amazon are headquartered, and China, where Tencent and Alibaba are located. These companies have close ties to the governments of the countries where they are based and protect them, he said.
An unhealthy relationship, a slippery slope
Researchers are also concerned about how the artificial intelligence services these cloud-based computers offer their customers are compounding their dominance. In fact, companies pay cloud providers to run machine learning algorithms for various tasks. In particular the analysis of images or the creation of chatbots.
These algorithms are partially created from data collected by the cloud service provider from its customers, but kept secret. However the multinational corporations that operate these computers are not afraid to use their power to gain a foothold in their customers’ industries.
Rikap cited the example of Munich-based Siemens, which leased Amazon’s cloud to build its healthcare AI platform. A few years later, Amazon offered similar services to Siemens customers. Healthcare platforms from Google and Microsoft also compete with services from Siemens.
“At some point, the only thing you can do as a business is use the cloud,” added Rikap. “There is no short-term solution”.