Managing Cloud Dependence: What the Amazon Web Services (AWS) Outage Reveals About Risk Exposure

Amazon Web Services (AWS), the world’s largest cloud provider, faced a widespread outage that disrupted thousands of websites and applications globally, Reuters reported in Business Insurance Magazine. The outage, which lasted more than nine hours, impacted platforms such as Snapchat, Reddit, Venmo, and Duolingo, as well as several major UK banks and telecom providers. 

AWS attributed the problem to a malfunction in a subsystem within its EC2 internal network that monitors the health of network load balancers. The issue originated at the company’s US-EAST-1 data center in northern Virginia, its oldest and most widely used region, and led to cascading effects across businesses dependent on AWS infrastructure.

By early afternoon, AWS reported gradual service recovery, though it acknowledged “elevated errors” across several services. Outage tracker Downdetector recorded more than 9,000 reports at the peak of the incident, with Ookla noting more than 4 million user reports overall. Experts, including Jake Moore of ESET and Nishanth Sastry of the University of Surrey, pointed to the event as a stark reminder of systemic digital fragility and the risks inherent in concentration across a few dominant cloud providers.

For risk managers, cloud reliance must be balanced with redundancy, diversification, and incident response planning. As Ryan Griffin of McGill and Partners noted in the article, hours of downtime translate directly to lost productivity and revenue. While Amazon Web Services stated that no evidence suggests a cyberattack, the event highlights how operational failures in core digital infrastructure can disrupt global commerce and erode business continuity, underscoring the need for resilient, multi-layered risk strategies.