Although half of the internet seemed to go down on February 28th, the cause of this was due to one company: Amazon (NASDAQ: AMZN).
On that fateful Tuesday, hundreds of thousands of websites experienced slower speeds. Companies like Target (NYSE: TGT), and Nike (NYSE: NKE) experienced slower loading times. In fact, Target and Nike experienced 991% and 642% longer in loading times, respectively. Smaller websites like the corporate messaging service Slack and the online reading service experienced delays, while the online reading service Scribd shut down completely.
Amazon's subsidiary company, Amazon Web Services (AWS) was the primary cause of the inconveniences seen in thousands of companies that day. But what exactly is Amazon Web Services?
Amazon started in 1994 as an online bookstore by CEO and Founder Jeff Bezos. Since then, Amazon has begun to sell multiple products online, from electronics to clothing. In just over two decades, Amazon has become the greatest commercial source for multiple items, allowing people to buy products from A to Z, as notated in their logo. It's smaller, subsidiary company Amazon Web Services began in 2006 as a cloud computing service that provides storage, content delivery and web assistance to multiple companies both large and small. With one service, companies like Netflix (NASDAQ: NFLX) and Walmart (NYSE: WMT) are able to quickly display and upload content to the internet, without spending extra costs for their own server. This comes in handy especially for smaller growing companies; Amazon Web Services allows them to store and access videos and articles online instantly.
This service has proved particularly lucrative for Amazon - although the parent company Amazon.com makes money off of its commerce, Amazon Web Services provided 8% of Amazon's revenue in the fourth quarter of 2016. Moreover, Amazon Web Services has become one of the most used internet cloud services. Controlling over 40% of the cloud services business, Amazon's competitors like Microsoft (NASDAQ: MSFT) and Google (NASDAQ: GOOGL) are struggling to keep up with their own cloud providing services.
It is easier to now understand why thousands of companies were negatively affected by the lapse in Amazon services. Perhaps this opens a greater question of monopoly: has Amazon's cloud computing service created its own possession of over half the internet? Given its large assistance to various companies, is seems likely that Amazon holds a greater impact over the Internet as once thought. "[W]hat happens when any service gets so big that its tentacles touch the entire industry?" asked a reporter from Gizmodo. "In the case of AWS, that .01 percent of the time when your data isn't available means that over a third of the internet ceases to function well."
It is even more striking that the outage was caused by a simple error by a contrite, lone Amazon Web Services engineer. Amazon stated that the engineer intended to remove a few servers for a subsystem, and unfortunately "a larger set of servers was removed than intended."
Interestingly, Amazon stocks were not affected by the power outage themselves. While websites across America suffered, Amazon was forced to fix their outage that lasted about 4 hours. In the world of business, time is money, and that day, a loss in sales across the internet was widespread.