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A widespread outage at Amazon Web Services (AWS) this week has disrupted a large portion of the internet, underscoring the fragility of the systems that support global digital infrastructure. The disruption, traced to a malfunction at an AWS data center in Northern Virginia, temporarily affected banks, business software platforms such as Xero, and social media services including Snapchat.
Although AWS reported that the underlying issue has been resolved, lingering service interruptions continue to highlight an uncomfortable truth: much of the world’s digital economy depends on a small number of centralized cloud providers.
Cloud computing, the practice of renting computing power, storage, and applications over the internet, has become a cornerstone of modern IT operations. It enables companies to scale services and reduce costs without investing in physical data centers. Today, more than 90% of enterprises use at least one form of cloud-based service, relying heavily on a pay-as-you-go model that treats computing power much like electricity or water.
However, the same efficiency that makes cloud computing appealing has also made it a point of vulnerability. AWS controls about 30% of the global cloud market, followed by Microsoft Azure at 20% and Google Cloud at 13%. Together, these three US-based giants handle the majority of global digital workloads. Outages in any one of them can send ripples across entire industries.
According to TechXplore, the concentration of cloud infrastructure in just a few providers creates what cybersecurity experts describe as “systemic risk”—a single point of failure capable of triggering large-scale service disruptions. Furthermore, the high cost and complexity of moving data between providers, known as data egress fees, can leave customers effectively locked in to one platform.
Experts argue that greater resilience will require a shift toward decentralized systems. Multi-cloud strategies—where companies distribute operations across several providers—can help reduce dependency on a single vendor. Pairing this with edge computing, which processes data closer to where it’s generated, can further limit disruption while improving performance and regulatory compliance.
The AWS outage serves as a reminder that the “cloud” isn’t weightless—it’s a vast, interconnected network of physical infrastructure. And when one part fails, much of the digital world feels the impact.
