On Monday, a significant outage at Amazon Web Services (AWS) made global headlines by disrupting access to some of the world’s largest websites and online services for several hours. For users, the effects were varied: some faced serious issues such as being unable to access critical banking platforms, government services, or work-related applications, while others experienced less severe inconveniences, like the frustration of potentially losing long-standing streaks on apps like Duolingo. Beyond the immediate disruptions, the incident has reignited a broader debate about the growing dependency of countries, including the UK, on a handful of dominant US-based tech firms for critical cloud computing infrastructure.
At the heart of the outage was an issue within Amazon’s core cloud computing operations in Virginia, one of the key hubs for AWS. The impact was felt strongly in the UK, where major institutions like Lloyds Bank and HM Revenue & Customs (HMRC) rely heavily on AWS’s cloud services. This event has raised urgent questions about whether the UK and other nations have become overly reliant on a small group of American technology giants and what steps might be taken to mitigate these risks in the future.
Amazon has become deeply embedded in the global cloud computing ecosystem. Cloud computing—the infrastructure that supports the delivery of countless IT systems and services—has become indispensable to modern life, and AWS, alongside Microsoft’s Azure, dominates this space. According to the UK’s Competition and Markets Authority (CMA), Amazon and Microsoft collectively hold approximately 30 to 40 percent of the cloud services market in the UK and Europe. Yet, this market share figure only scratches the surface of their true significance. Even if a particular service or website is not hosted directly by one of these giants, it often depends on underlying components or services that are.
Professor James Davenport, Hebron and Medlock Professor of Information Technology at the University of Bath, explained that cloud deployments are complex infrastructures with many interconnected and often invisible parts. Brent Ellis, a principal analyst at market researcher Forrester, described the outage as exposing the “nested dependency” between popular digital platforms and the myriad services that form the technical foundations of the web. He emphasized that this “nested dependency” creates inherent risks: the assumption that these tech giants are “too big to fail” or inherently resilient is a dangerous misconception, as demonstrated not only by this AWS outage but also by previous incidents.
Ellis warned that the concentration of cloud services among a few providers creates a highly concentrated risk. Even a relatively small disruption at one provider can ripple out to affect the global economy, as millions of users experienced firsthand on Monday. This concentration of risk has prompted many to ask why so many organizations continue to rely heavily on these few US firms.
Experts point out that there are clear advantages to contracting with major cloud providers like Amazon, Microsoft, or Google. For companies, outsourcing cloud infrastructure means avoiding the steep costs of maintaining their own servers and data centers. These “hyperscalers” also offer the ability to handle sudden spikes in web traffic efficiently and provide robust cybersecurity measures that are often beyond the reach of smaller firms. Vili Lehdonvirta, a professor of technology policy at Aalto University in Finland, noted that the cloud computing sector is fundamentally driven by economies of scale, making it challenging and expensive to reduce dependence on the dominant US players or to build more sovereign, national cloud infrastructures.
Transitioning away from these entrenched providers or diversifying across multiple cloud platforms is not a straightforward task. Stephen Kelly of Circata highlighted the difficulties companies face when considering migration. With vast amounts of enterprise data now stored on platforms like AWS, switching providers can become prohibitively expensive and complex. Moreover, cybersecurity expert Thomas Hyslip, who teaches at the University of South Florida, added that there are geopolitical considerations as well. He argued that, despite concerns about concentration, it may actually be safer for such critical infrastructure to be based in the US, where government interference is relatively limited compared to other countries. However, he acknowledged a potential downside: in the event of geopolitical conflicts or wars involving the US, government intervention could disrupt services for adversaries or even allies.
Despite these practical considerations, unease remains about the current market dominance of a few large providers. This dominance echoes trends across the broader tech industry, from social media platforms to streaming services, where a handful of companies wield outsized influence. In the cloud sector, this concentration risks marginalizing smaller providers and stifling competition.
Nicky Stewart, senior advisor to the