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A cloud infrastructure analyst said Amazon Web Services (AWS) could begin to lose customers if service outages like the one that occurred Monday are repeated.
"Major vendors who run their entire businesses on AWS, such as Netflix, Foursquare, Pinterest and Salesforce.com’s Heroku platform were affected in the October 2012 outage," Jillian E. Mirandi, an analyst with Technology Business Research, wrote in report following Amazon's quarterly earnings report Thursday. "If major companies such as these continue to experience outages, they will be tempted to move services onto competing IaaS products.
"TBR believes that the market spotlight is on AWS when it comes to outages as it is the biggest IaaS vendor and supports well-known customers," she added.
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An outage in Amazon Web Services' Northern Virginia market Monday caused website outages throughout the day. The incident followed a similar occurrence on June 14 in the same market and one on April 21, 2011, also in the Northern Virginia data center.
Although Amazon mentioned AWS only briefly in its quarterly report and during its conference call with analysts, Mirandi estimated AWS' quarterly revenues grew 65 percent year-over-year to $451 million.
During the earnings call, Amazon Chief Financial Officer Tom Szkutak said the company planned to invest heavily in AWS, without giving details.
Mirandi said AWS continues to use price cutting as its chief weapon to maintain its market leadership position but said Google can challenge that approach.
"We maintain that if any vendor can compete with AWS on price, it is Google, as both companies have other large and successful business units to support profitability and revenue stability," Mirandi wrote. "TBR expects further price cuts from AWS in response to the emergence of Google Compute Engine as an IaaS rival, but we maintain that continued price battles are not sustainable."