Amazon Outage May Have Cost Company Nearly $5 Million in Lost Sales

The sky isn't falling, but it sure feels like the web is falling apart lately. Last Friday, Google went dark for full 5 minutes, resulting in a 40 percent drop in Internet traffic and highlighting just how dependent we are on the company's various online services. Around the same time, went offline and stayed that way for three days before Microsoft was able to alleviate the problem, which turned out to be a failure in a caching service that interfaces with devices using Exchange ActiveSync. Capping off a forgettable weekend in cloud computing, Amazon suffered an outage yesterday that, according to various reports, lasted anywhere from 15 minutes to 40 minutes.

During the outage, which began at around 3:00 P.M. ET on Monday, users were unable to access Amazon's main page or its product pages. The cause of the outage is not yet known, though around the time trouble began, Amazon revealed it was "currently experiencing elevated error rates for the AWS Management Console."

Amazon box
Image Source: Flickr (MikeBlogs)

These outages are a big deal on a number of levels. For one, they highlight the inherent risk involved with cloud computing. If you rely on services like Google Docs or have websites hosted by Amazon, your operations are directly dependent on their ability to keep their servers up and running.

Secondly, there's a financial impact. If Amazon was offline for a full 40 minutes, it could have cost the company $4.72 million, assuming the company rakes in $9,823 every five seconds as estimated by 500 Friends.