AWS Outage Shows Vendor Dependency Risks

Amazon Web Services’ 15-hour outage last week exposed the global economy’s growing dependence on a few dominant cloud providers and showed how little companies can do to protect themselves when critical services go down, Cassandre Coyer and Olivia Alafriz report.

As more companies rely on third-party vendors for essential operations like payroll and security, contractual agreements and insurance protections provide little relief during widespread outages. Smaller firms, in particular, have little power to negotiate stronger safeguards with dominant providers like AWS.

Cyber insurance may help offset some financial losses, though coverage often includes waiting periods that limit recovery. CyberCube estimated ...