Since Amazon’s ($AMZN) web hosting services went down early last Thursday morning, much cautionary ink has been spilled regarding the viability of the cloud. The news media loves to jump on a negative story in a hot area and amplify the dangers.
But Amazon’s now widely reported storage problems which left many web sites (and some popular ones) down is actually an incredibly bullish signpost for the cloud.
I can’t help but think back to the outages the old $AOL suffered in late 1996 as it shifted from metered connectivity to un-metered for a flat fee of $19.95 . Usage exploded and AOL was unable to handle the increase and suffered repeated outages and dial up busy signals.
Subsequent news reports ranged in focus from the viability of $AOL to the internet as a whole. Both were ridiculous as AOL went on to grow revenues and its stock price substantially for three years before the Time Warner debacle and well, you know, the internet is now a pretty big thing.
Closer to home and a bit later on but still prior to Y2K, there was a period in which every time Amazon.com or other e-commerce sites like $EBAY went down for even short periods, the media would jump all over the story and the stocks would sell off hard.
The down time at Amazon is more representative of a new and profound technology being applied in its early days. This is a period when the technology is not well understood, where the vast majority of infrastructure build and business is ahead and in which the media will blow every hiccup well out of proportion.
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