Many businesses are not adequately protected from the loss of cloud services, which can cause significant financial losses. This is a major issue, as companies collectively spent $61 billion on cloud infrastructure in Q4 2022 and there is likely to be even more growth in the future.
Customers of cloud service providers usually enroll in SLAs that outline their commitments to service availability and performance. These SLAs often have penalties associated with them should agreed-upon service levels not be achieved, but these rarely cover the full losses that a cloud outage could cause its customers.
Gabriella started up her website sales business after retiring from a successful career as a fashion designer. She quickly noticed that many of the other sellers were using cloud providers like OVHcloud, which she considered to be inferior to her own provider, which was backed by its own data center. When millions of websites went offline after a major data center fire in France, Gabriella took to social media to complain that her cloud provider had only offered her a voucher worth around $30 when she estimated the damage to be closer to $2,000. Although some customers did express sympathy for Gabriella’s situation, most onlookers seemed unwilling or unable do anything about it.
Regardless of the size of your e-commerce business, there is a potential revenue impact when cloud services experiences outages. Whether it’s due to technical difficulties or service interruption, cloud downtime can cause customers to lose productivity and miss opportunities. In other cases, businesses may have built in customer service agreements that require them to compensate their customers for lost time or revenue. By anticipating and planning for cloud outages, businesses can avoid significant negative impacts on their bottom line.
The traditional insurance model isn’t always well suited to insuring against cloud downtime. For larger organizations, the cost of maintaining duplicate data centers can be prohibitive, and even small businesses may not be able to afford the premiums necessary for a comprehensive policy. In response, some providers are beginning to develop models that focus exclusively on cloud security and redundancy. These policies promise quick recovery times in the event of a data loss, and usually include provisions for backup and restore services as well as Disaster Recovery Centers24
