Grazed from TechWorld. Author: Stephanie Overby.
Amazon Web Services (AWS) recent storm-related outage, which left Web sites including Netflix, Pinterest, and Instagram inaccessible, is just the latest in a string of costly cloud failures. Since 2007, a total of 568 hours of downtime at 13 major cloud services providers had an economic impact of $71.7 million dollars, according to the International Working Group on Cloud Computing Resiliency (IWGCR). Average down time has been 7.5 hours per year, according to IWGCR, an availability rate of 99.9 percent well below the required reliability for mission critical systems. "Cheap cloud services can be expensive," says Kevin C. Taylor, partner in the business services department of law firm Schnader, Harrison, Segal & Lewis.
While the typical cloud contract contains uptime clauses and credits for missed service levels, it often fails to adequately protect the enterprise customer. Service-level agreement (SLA) credits, typically capped at a proportion of monthly service fees "do not compensate for business losses associated with the downtime of a production application," explains Taylor. "Even in an extreme case of sustained and severe outages the credit amounts will be derisory–[say,] $20,000–in comparison to the business impact to the customer, which could potentially be in the millions."…