The recent Amazon Web Services (AWS) outage sent shockwaves across industries worldwide, exposing just how deeply modern digital infrastructure depends on a handful of US technology giants. From banking to government portals, streaming platforms to learning apps, millions of users felt the ripple effects when key systems suddenly went dark.
On Monday, AWS experienced a major disruption originating from its Virginia data centers, impacting some of the world’s most popular websites and essential services. The outage lasted several hours, paralyzing operations for companies, institutions, and individuals across multiple continents.
While the downtime was temporary, the incident sparked a much larger conversation — one about the fragility of the global internet, and the degree to which modern life relies on a small number of corporations to keep the world connected.
How Deep the AWS Footprint Runs
Amazon’s cloud arm, AWS, powers a vast share of the world’s internet traffic. Alongside Microsoft’s Azure and Google Cloud, it forms the backbone of countless digital services — from data storage to payment systems, video conferencing tools, and online education platforms.
According to the UK’s Competition and Markets Authority (CMA), AWS and Azure together control between 30% and 40% of the cloud services market in the UK and Europe. That figure doesn’t even account for the many smaller systems and applications indirectly dependent on them. Even if a business doesn’t directly use AWS, it might rely on other software that does — a concept experts call “nested dependency.”
Brent Ellis, principal analyst at Forrester Research, explained that this layered dependency makes the digital ecosystem incredibly complex. “There’s a mistaken assumption that companies like Amazon are too big to fail,” he said. “In reality, even short service interruptions can ripple across the global economy.”
The Economic Trade-Off: Cost vs. Control
So why do so many organizations continue to depend on these few cloud giants, despite the risks? The answer lies in economies of scale. Using large-scale providers like AWS or Azure offers unmatched advantages — from lower operational costs to robust cybersecurity measures and the flexibility to handle fluctuating traffic demands.
For startups and major corporations alike, building and maintaining in-house servers would be prohibitively expensive. Instead, leasing computing power from Amazon or Microsoft provides the efficiency and global reach needed to stay competitive.
However, experts warn that this convenience comes at a price — one that becomes evident during outages like the one witnessed this week.
Professor Vili Lehdonvirta from Aalto University noted, “Cloud computing has become a critical dependency, but reducing that dependence would be extremely costly. Sovereign infrastructure sounds appealing in theory, but in practice, it demands billions in investment.”
The Hidden Dangers of Centralization
The latest AWS disruption highlights a growing issue — digital centralization. When a few major players dominate the infrastructure, even minor technical faults can have major real-world impacts. Banks, airlines, hospitals, and even government agencies were affected, illustrating the cascading risks of over-reliance on single providers.
Cybersecurity expert Thomas Hyslip added that while having these systems based in the US offers some regulatory stability, it still presents national security concerns. “If a geopolitical conflict ever involved the US, control over these networks could quickly become a weapon,” he warned.
Such concentration of control not only creates vulnerability but also stifles innovation among smaller competitors who struggle to match the scale and resources of these tech giants.
Calls for Diversification and Regulation
The AWS outage reignited demands for more open, competitive, and resilient cloud markets. Nicky Stewart, senior advisor to the Open Cloud Coalition, emphasized the need to diversify workloads across multiple providers. “This incident is proof that no single provider should hold so much of our digital world in their hands,” she said.
In July, the UK’s Competition and Markets Authority launched an investigation into the country’s cloud services market. Its findings suggested that the system “is not working well,” with Amazon and Microsoft’s dominance potentially hindering fair competition. The regulator is now considering designating both firms as holding strategic market status, which would empower the CMA to impose measures encouraging competition and transparency.
Stewart argues that fostering fair competition is essential for national resilience. “A more open and interoperable cloud market would prevent these large-scale failures from crippling essential services,” she said.
What Comes Next
For now, AWS has reportedly addressed the issues behind the outage and restored normal operations. However, experts believe the incident should serve as a wake-up call for governments and corporations alike.
Stephen Kelly, CEO of the technology consultancy Circata, said that while diversifying cloud providers might seem expensive or logistically difficult, it’s no longer optional. “Enterprises need to start treating cloud resilience as a matter of business survival,” he stated. “The cost of downtime is far greater than the cost of diversification.”
He urged governments, particularly in Europe and the UK, to implement policies that require organizations to use multiple cloud providers and maintain continuous data replication. Such policies could help mitigate future large-scale disruptions.
Lord Leong, speaking in the UK House of Lords, confirmed that the government had already contacted AWS for assurances on preventing similar incidents. “We are working to diversify the UK’s cloud ecosystem and promote greater participation from UK and European providers,” he said.
The Bigger Picture
The AWS outage is more than just a technical glitch — it’s a reflection of how modern society’s digital foundations rest on a precarious structure. From national economies to personal data, the web of dependencies built around a few US tech giants has grown too large to ignore.
While cloud computing remains essential for the digital age, this event underscores the importance of resilience, competition, and sovereignty in technology infrastructure. As nations and businesses move forward, one question looms large: how much longer can we afford to keep all our data in just a few baskets?
