Major AWS outage caused 'hundreds of billions' in financial losses

A recent Amazon Web Services (AWS) outage is estimated to have caused financial losses "easily reaching hundreds of billions of dollars, according to Mehdi Daoudi, CEO of internet performance monitoring firm Catchpoint, as per reports. The massive disruption caused productivity losses and stopped or delayed business operations across numerous sectors, from airlines to factories.

The service interruption, which primarily affected the critical US-EAST-1 data center in northern Virginia—a site linked to at least three major outages in the past five years—brought numerous major platforms and services to a standstill:

Social and Gaming: Reddit, Snapchat, and Fortnite experienced significant downtime.

Finance and Trading: Digital app Venmo, cryptocurrency exchange Coinbase, and trading app Robinhood were all hit.

Transportation and Tech: Ridesharing company Lyft, video calling site Zoom, and AI startup Perplexity were affected.

Amazon's Own Services: Even Amazon’s own retail website, Prime Video, and Alexa services suffered disruption.

Internet monitoring firm Ookla reported that at least a thousand companies were affected by the incident.

Amazon announced on Monday afternoon that its cloud service was back to normal, though a backlog of messages in some services would require a few more hours to process. The company promised a detailed post-event summary but did not explain the repeated issues at the US-EAST-1 center.

Following the extensive damage, attention is now turning to software developers who fail to prepare for such events. Ken Birman, a computer science professor at Cornell University, told Reuters that while AWS offers tools to build fault tolerance and create backups with other cloud providers, some companies intentionally skip these vital steps.

"Those companies are the ones who really ought to be scrutinised later," Birman stated, arguing that firms "cut costs and cut corners" when launching applications, leaving them dangerously vulnerable to outages.

This event marks one of the largest internet disruptions since last year’s CrowdStrike incident, which impacted essential services like hospitals and airports, underscoring the extreme dependence of modern infrastructure on a few key cloud providers.

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