Sometime after 7 pm Pacific time, Thursday, September 8th, Hotmail service ceased to be available to many users around the world. Many users registered complaints with Microsoft and DownRightNow.com. Microsoft acknowledged the problem at 9:45 pm, and said users may also have had trouble accessing their files on the SkyDrive storage service and in Windows Live applications — including Word, Excel, and PowerPoint in Office Live. Service was not restored around the world for over eight hours.
The term “Cloud Computing” has recently become a marketing buzzword, the meaning of which is – a little bit cloudy. The term has actually been in use for several decades, and simply means routed information with no specific path. Today, it is generally understood as simply meaning “Internet”.
This failure is an example of systemic risk, a risk that affects not just one company or one location — but every user in the cloud. Systemic risk is the risk of an entire system or market collapsing, as opposed to risk associated with any individual service. Reliance on cloud computing poses a systemic risk.
While many services offer rich and robust features when deployed in the cloud — the benefits have to be weighed against the consequences of down time. The risks of cloud computing are not yet fully understood, and there are significant risks involved when shifting local networked operations into the cloud.
Do we, as operators of a thing” wish to have a system that is thought to be designed as so robust it almost never fails but when it does it does so spectacularly – or do we wish for a more flexible system that may have several little failures along that way that can be adapted to and corrected?