Recently, the rise in web outages has revealed the risks and fragility of allowing 3 companies to hold a monopoly over the internet: Amazon Web Services (AWS), Microsoft Azure, and the Google Cloud Platform.
The reliance of our internet on these companies is dangerous, but fixing this issue requires time and money.
According to Statista, AWS, Azure, and Google Cloud “account for more than 60 percent of the ever-growing cloud market, with the rest of the competition stuck in the low single digits.”
This market dominance is an issue because it is difficult for new or smaller companies to gain traction.
Although the Cloud Computing industry is increasingly profitable, the concentration of power is a problem because smaller companies lack the resources to compete.
In a report done by the UK’s Competition and Markets Authority, it was explained that other cloud providers would struggle to close the gap, partly due to the size and dominance of AWS and Microsoft’s Azure, leaving smaller and newer companies effectively locked out of the market.
To get onto the scale of these giants, you need large amounts of capital, which most small companies lack, to build the data centers and store users’ information.
If there were an easier way for small companies to compete, outages would become less impactful.
However, funds are only one reason why these giants lack competition.
The other–and more pressing–is that Amazon, Microsoft, and Google take part in “opaque and discriminatory pricing, technical barriers to switching providers, excessive fees for data transfers and bundling cloud services with other products,” according to The Financial Times.
These practices lack regulation and effectively block other companies’ efforts to gain market share.
The tactics used by AWS, Azure, and Google Cloud allow them to keep most of the revenue.
According to Visual Capitalist, AWS is on track to make 120 billion in annual revenue.
Visual Capitalist continued that Azure is close behind it, expecting to make 79.2 billion this year.
Together, these reasons explain the lack of competitors, which is what led the recent AWS outage to be as impactful as it was.
The AWS cloud is the largest global cloud computing service and “spans 120 Availability Zones within 38 Geographic Regions,” according to Amazon.
This statistic puts into perspective the global reach of AWS.
This reach is dangerous and unstable.
Millions of businesses and users use AWS, and most were affected on October 20th, when their servers went down, according to the BBC.
Companies specializing in education, to entertainment companies such as Snapchat and Roblox, reported errors with their systems.
Schools, businesses, and more lost out on almost a full day of productivity.
According to CNN, the financial impact of this hour-long outage is expected to cost hundreds of billions of dollars because millions of workers rely on the internet.
Had the internet not been monopolized, the financial impact wouldn’t have been as detrimental.
This event has caused people to question whether or not the reliance on only a few corporations is sustainable.
This issue should cause regulators, tech leaders, and even everyday users should push for fairer competition and transparency.
Overall, this outage not only highlights the vulnerability of our internet but also reveals the risk of entrusting such a critical system to three dominant tech giants.