Companies collectively spent $61 billion in cloud infrastructure in the fourth quarter of 2022, and there is more growth to come. However, companies are poorly protected from losses caused by cloud downtime.
“Cloud service providers often offer service level agreements (SLAs) that outline their commitments to service availability and performance.” AV8 general partner Amir Kabir told TechCrunch+. But although sanctions are often involved in case agreed service levels are not achievedthese rarely cover the total losses that a cloud outage could inflict on your customers.
Case in point: After millions of websites went offline after a big fire in the data center in France, a small online seller complained to the press that her cloud provider, OVHcloud, was only offering her a coupon worth a few months of free hosting: around $30, when she estimated the actual damage to be close to $2,000.
For eCommerce businesses large and small, it’s easy to see how cloud downtime can result in lost revenue. But cloud outages can have a negative impact on revenue for businesses of all kinds, whether through lost productivity or because they have their own service level agreements with customers to whom they may owe compensation.
The usual corollary to risk is insurance against it, but when it comes to cloud downtime, the insurance industry has yet to fully catch up.