S3 Goes Down – A Post Mortem

When Sun began using the slogan “the network is the computer,” it was about selling more hardware. But to mix metaphors, this is not your father’s compute cloud.

Today’s cloud is about delivering business critical services over the Internet. As a result, if there’s one thing to be learned from Amazon’s outage, it’s that operational excellence really matters.

Gorillas such as Amazon and Salesforce rely on their existing infrastructure to leverage cost and operating efficiencies. Outside of differentiating in what promises to be a crowded space, the real challenge for startups will be delivering on their operational promises.

Both DIY and partnering have their challenges. With DIY, a company has to build out the infrastructure and operate it, even before it reaches customer scale. But it has as much control as possible. Partnering means significantly lower cost up front, but also lower control and potentially lower margins at very high scale. A hybrid model may make sense — some companies delivering cloud computing services fail over to Amazon or other underlying providers.

Especially when critical business infrastructure is outsourced, transparency is key. One thing both Amazon and Joyent seem to have had in common was a lack of communication. Customers had no idea whether the problem was with the hosting provider, the network, or something else, nor when the problem would be solved.

As with many markets, there are two classes of startups entering the fray, those with a vertical approach and those with a horizontal one.

• Vertical players typically focus on a particular technology as their point of differentiation. They may enhance the underlying platform by making it more scalable or more reliable. On the plus side, they can be more nimble in the short-term due to their focus. But technologies come and go quickly, especially on the Web. It seems like just yesterday that PHP was the new wave”¦ or was it Java?
• Horizontal players are building out a wide variety of services. In the short term, it’s more difficult for them to execute as quickly. But as we have seen with Amazon, if a large enough community evolves, the community itself may lead the way in asking for and ultimately delivering the most leading edge services on top of cloud platforms.

Regardless of which approach succeeds, and there may be room for both, one thing is certain. No, it’s not that you should think twice about hosting in the same place that Twitter does (although that may very well be a good idea).

It’s that while cloud computing services are delivered virtually, customer expectations are very real indeed. Fail to deliver on those expectations — or worse yet, fail to communicate with your customers about what is going on and why — and face the consequences at your own risk.