The recent AWS Outage brought down major services, sparking an important conversation about the world’s dependence on US cloud providers.
It was a Monday that millions won’t soon forget. Across the globe, what started as a technical glitch deep within Amazon Web Services (AWS) operations in Virginia quickly escalated into a widespread digital crisis. For hours, some of the world’s largest online platforms—from vital banking and government services to everyday work tools—were knocked offline. The chaos ranged from the serious, like losing access to critical financial information, to the mildly absurd, such as the panic over a lost winning streak on the language learning app Duolingo.
This single outage has done more than just disrupt our week; it has reignited a critical debate: Are we, particularly countries like the UK, dangerously over-dependent on a handful of colossal US tech firms for our essential infrastructure? The effects of the AWS Outage were undeniable.
The fact that an issue originating thousands of miles away could severely cripple UK institutions like Lloyds Bank and HMRC underscores a deep vulnerability in our national digital backbone. This isn’t just a technical problem; it’s a structural one.
The Nested Dependency: A Ticking Clock?
Amazon, through its AWS cloud computing operations, and Microsoft, with its Azure services, have become so deeply embedded in the fabric of modern IT that their influence is nearly absolute. According to the UK markets regulator, the Competition and Markets Authority (CMA), these two giants effectively corner between 30 and 40% of the market in the UK and Europe.
Yet, even that daunting figure may not fully convey their significance. As Prof James Davenport, Hebron and Medlock Professor of Information Technology at the University of Bath, points out, “A cloud deployment is a complicated piece of infrastructure with many components, some invisible.” A business might not host its own service with AWS, but a critical piece of infrastructure it relies upon—a key payment gateway, a security service, or a storage tool—still might be.
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Brent Ellis, a principal analyst at market researcher Forrester, calls this exposed risk a “nested dependency.” He argues that the outage highlights the inherent danger in this concentrated risk. “There’s great appeal to using tech giants, but assuming they are too big to fail or inherently resilient is a mistake, with the evidence being the current AWS Outage and past ones,” Ellis stated. He warned, “It’s a feature of a highly concentrated risk where even small service outages can ripple through the global economy.” Those ripples were precisely what millions of users felt on that turbulent Monday. The far-reaching nature of the recent AWS Outage is a major concern.
The Siren Song of Economies of Scale
If the risks so clearly demonstrated by the AWS Outage are so clear, why have so many companies tied their fortunes to such a limited number of providers? The answer, experts contend, is rooted in economic necessity and operational efficiency—the irresistible draw of economies of scale.
Migrating to the cloud in the first place saves companies the enormous, “hefty costs” associated with running their own on-premise servers. More importantly, these tech behemoths—dubbed “hyperscalers”—can effortlessly handle the massive, unpredictable fluctuations in site traffic while offering sophisticated, industry-leading cybersecurity. As Vili Lehdonvirta, professor of technology policy at Aalto University in Finland, told the BBC, the entire cloud sector is “driven by economies of scale.”
The flip side, however, is the equally colossal cost of leaving. Stephen Kelly of Circata notes a “prohibitively high” eventual cost for migration, given the “explosion of enterprise data now stored with a single provider like AWS.” Diversifying, while essential for resilience, is a monumental operational and financial challenge made more urgent by the AWS Outage.
Furthermore, some experts even find a silver lining in the current concentration. Cybersecurity expert Thomas Hyslip of the University of South Florida argues that hosting in the US is preferable because “you don’t have a lot of government interference.” However, he cautions that this concentration could just as easily invite intervention. “If god forbid there was ever another war involving the US and some other countries,” Hyslip mused, “there could be the opportunity for the government to interject themselves and cause problems.” The potential for external disruption beyond the AWS Outage remains.
A Political Solution to a Technical Problem
For many industry voices, the AWS Outage incident was the final straw. Nicky Stewart, senior advisor to the Open Cloud Coalition, insists the outage “demonstrated the risks of over-reliance on two dominant cloud providers, an outage most of us will have felt in some way.”
The CMA, already on the case, said in July its investigation into the UK cloud market found it was “not working well.” It has recommended designating Amazon and Microsoft as having “strategic market status,” a step that would grant the regulator the power to mandate changes to boost competition. This recommendation was spurred by events like the AWS Outage.
The solution, according to Stewart, lies in demanding “a more open, competitive and interoperable cloud market”—one that is resistant to a single provider bringing “so much of our digital world to a standstill.”
Ultimately, the technical challenge requires a political mandate. Kelly suggests the UK government must “take the lead in mandating data resilience standards” across all key industries. This would involve “policy frameworks that require the use of two or more distinct cloud providers and promote continuous data replication.”
Responding in the House of Lords, Lord Leong confirmed the government is in contact with AWS about future mitigation. He affirmed the commitment to actively work “to diversify the UK’s cloud ecosystem and encourage greater participation by UK-based and European providers.” The message is clear: the collective sigh of relief following Monday’s recovery must not turn into complacency. The work to future-proof our digital lives has just begun following the recent AWS Outage.
