For 7 hours, in December 2021, there was an internet outage. This has resulted in significant damage to many businesses. the guilty? An error on Amazon’s cloud servers in Northern Virginia.
This incident, far from being isolated, reveals the extent to which companies and governments are entrusting their computing power to a handful of cloud services. Just three companies – Amazon, Microsoft and Google – control about two-thirds of the cloud infrastructure. According to Vili Lehdonvirta, chief expert in 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 an unexpected fatal infection.
Netflix, a major customer of Amazon Web Services (AWS), complained that it would struggle to operate if Amazon removed it from its servers. Even the majority of nodes in Ethereum, the decentralized blockchain network, depend on AWS. In fact, it can be said that this clearly centralized cloud service company can take any business offline.
At the same time, large cloud service companies are hoarding money and consolidating their dominance. Amazon drew 74% of its 24.8 billion dollars in revenue from AWS last year, compared to 58% en 2018. And the money will keep 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 technological addiction, the most obvious solution would be tomassively stop using “the cloud”. Rather, it would be a return to the distributed computing that prevailed in the 1990s. In those years, companies ran their own servers. But that is easier said than done. “It’s a real challenge to scale up a system that works with hundreds of millions of users,” says Lehdonvirta.
Likewise, companies do not have many reasons to avoid the cloud in the short term. After all, companies like Zoom have quickly taken off. These rely heavily on Amazon’s cloud servers.
Political will is also limited, notes Mr Lehdonvirta. The major cloud players are divided between the United States, where Google, Microsoft and Amazon have their headquarters, and China, where Tencent and Alibaba are located. These companies have close ties to the governments of the countries they are based in and protect them, he says.
An unhealthy relationship, a slippery slope
Researchers are also concerned about how the artificial intelligence services these cloud-based computers offer their customers are consolidating their dominance. Actually companies pay cloud providers to run machine learning algorithms for various tasks. Especially the analysis of images or the creation of chatbots.
These algorithms are created in part from data that the cloud service provider has collected from its customers, but is kept secret. Yet the multinational corporations that operate these computers are not afraid to use their power to gain a foothold in their customers’ industries.
Rikap cites the example of Munich-based Siemens, which leased Amazon’s cloud to build its AI platform for healthcare. A few years later, Amazon offered similar services to Siemens customers. Health 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,” Rikap added. “There is no short-term solution”.