Cloud Computing Outages - Strategic Analysis 2009-2011 (Updated 21/11/2011)

Forrester Research expects the global cloud computing market to reach $241 billion in 2020 compared to $40.7 in 2011. Gartner expects the global cloud computing market to reach $176.8 billion in 2015 from current $89.4 billion in 2011. IDC expects the global cloud computing market to reach $79.5 billion in 2014 form $21.5 billion in 2010. According to Gartner's 'Executive Program Agenda Survey”, Cloud computing has emerged as the top technological focus for CIOs. CIOs expect adoption of cloud technologies will free up to 50 percent of infrastructure and operational resources, which can be utilized for other strategic priorities.

 Key Outages in 2011:

Key Outages in 2010

Key Outages in 2009

Cloud Computing Outages - Analysis
First and foremost there is no escape from outages. Outages are bound to happen. Dominant players like Amazon, Salesforce, Microsoft and Google also had seen significant outages in the last three years. Outages have affected only small parts of the cloud and did not bring down the whole cloud. Problems persisted in single data centers which caused problems to small number of total users. Data loss was small and data was successfully recovered. The time lag in recovering the data was an issue in some cases there was time lag but data was restored.

Outages were caused mostly during the software updates during the maintenance and updating cycles. The scripts and update errors at the datacenters caused the most of outages which effected the small part of the cloud users. Hardware issues were also to be blamed like Network failures, routers and switches problem and the overloads of the networks. Power failures and lack of proper infrastructure are other reasons for outages, Data storage and database issues in terms of proper data back ups are other areas of concern. Communication was another issue and all the vendors were not communicating with the clients during the outages and this has lead to some negativity towards cloud computing. In some cases the vendors are not reporting properly about the steps taken to avoid the future outages.

There was a failure to route the traffic to other datacenters when one data center goes down or when most of the network gets overloaded in the data center there was no options for cloud providers to deviate or route the traffic to some other point where the traffic can be controlled. PR issues, the outages were publicized on the social media networks like twitter and blogs and there was a massive discussion going on and the outages were tracked by the users on an hourly basis which put more pressure on the service providers and cloud users. All the major vendors have learnt significant lessons during these outages and focusing in improving their service and invest in networks and datacenters and other infrastructure. The cloud computing is seeing good growth in last three years and the outages are helping them to improve further.

Strategies to be adopted by Clients

Clients/customers should understand that cloud computing also can fail and result in major disaster for the business. The notion that it is absolutely safe on cloud is wrong. Clients should study cloud service provider offering thoroughly in terms of the SLAs, disaster recovery plans, back ups and storage, response times in outages, communication process to be followed during outages, financial liability and loss security etc. Cloud computing is mostly used by social networking companies and email and productivity suit providers which are used by most people and the communication is very critical with the people as the loyalties will shift fast if the users are not provided with proper information. Communication is very critical and may save ort destroy the business.

Clients also should have necessary back up, storage and other facilities and disaster recovery plans on their premises so as to over come the worst scenarios. Data loss will have severe implications both in terms of financial loss and reputation loss. Choose the best service provider who has the capability to service increasing volumes in future and has the capability to invest and develop and grow in the cloud. The capability of cloud service provider to not only secure the data and reduce the cost but also have expertise in foreseeing the cloud growth problems and overcome them.

Clients should look at cloud as a tool to effectively achieve the organizational goals and should work with the cloud providers closely for mutual benefit. Clients have to document all the risks associated with the cloud computing and all the risks have to be mitigated and the management have to employ skilled people to manage the cloud activities and coordinate with the cloud service providers during the outage. Outages have to be studied properly and necessary steps and mitigation strategies have to be formulated to avoid the repeated occurrence in future. Contracts and financial penalties for outages have to be clearly defined with out ambiguity.

Strategies to be adopted by Cloud Service Providers
Service offerings have to be clearly defined. All the SLAs, Disaster recovery mechanism, Data storage and recovery, Response times, communication process, financial penalties, etc have to be clearly mentioned in the contracts. Infrastructure has to be developed and datacenters have to be installed at various geographical locations and systems have to be secured from power failures and other natural disasters. Employ skilled experts for development, maintenance and updating cloud software and necessary hardware also has to be installed. Outages were caused due to improper updating cycles like script errors and software bugs.

Technology has to be developed as recent outages highlight the fact that cloud computing issues are recurring on regular basis and the necessary technology advancements have not been adopted. Lack of proper coordination among the service providers and failure to coordinate their efforts in defining industry standards is another issue. Most of the outages have been due to lack of proper understanding or foresight into the cloud demand and issues and all the service providers must have all risks documented and frameworks in place to tackle all the issues. Failure to communicate properly during cloud outages is to be avoided with an agreed communication policy in place and necessary reports have to be provided once the outage is successfully tackled. All the reports should be provided all the stakeholders accordingly.

Social media is actively involved in cloud computing as major user and also plays a major role in creating havoc during outages as worried users will crowd online and critically discuss the outage and hence the service providers have to be very careful during this time. Service providers have to not only work closely with clients but also with the networking equipment providers and data centers and innovate and develop the necessary future technologies for the effective cloud computing development. Invest in the R&D is the critical differentiator and success factor for the existing service providers and new entrants. Service providers have to make clients understand how cloud computing will be a necessary tool in achieving the organizational goals and constantly work with organizations to improve the services and offer new services.