AWS Cloud Outage Reveals Vendor Concentration Risk

An Amazon Web Services (AWS) outage on October 20, 2025, has highlighted the risks of vendor concentration in cloud infrastructure. The incident, which affected thousands of services globally, underscored the interconnectedness and complexity of modern IT systems.

The outage was centered in the AWS US-EAST-1 region, located in Virginia, and was first reported in the early hours of October 20. It was caused by a domain name system (DNS) resolution failure affecting DynamoDB database service endpoints, which cascaded to affect IAM, EC2 instance launches, and dozens of other AWS services.

The outage lasted approximately nine hours, with some customers reporting residual errors and backlogs for several hours after the incident. Notable services affected by the downtime included Snapchat, Ring, Robinhood, McDonald's mobile ordering, Signal messaging, and Fortnite gaming servers.

The disruption was not limited to AWS customers. Organizations without direct AWS contracts experienced downtime because their SaaS vendors, payment processors, and authentication services depended on the US-EAST-1 infrastructure.

"The AWS incident today is a timely reminder that the internet is far more interconnected and complex than most people realize," said James Barnes, CEO and founder of website monitoring vendor StatusCake. "Even if your company doesn't directly host on AWS in the impacted region, it may well depend on services that do; whether that's authentication services, analytics platforms, payment gateways, your CRM or customer services platform, APIs, and CDNs (content delivery networks)."

"This consolidation creates concentrated points of failure, where a single regional outage can affect multiple industries simultaneously," said Betsy Cooper, executive director at Aspen Policy Academy. "On the one hand, this isn't necessarily a bad thing; these companies have huge incentives to keep data secure and to prevent outages. But on the other hand, when failures happen, they can cause widespread harm."

"Many organizations were impacted indirectly because their software supply chain relies on AWS, even when they don't realize it," said Chirag Mehta, vice president and principal analyst at Constellation Research. "SaaS applications, APIs, authentication providers, and data-integration tools often sit on AWS. When one layer of that chain fails, it cascades quickly across dependent systems."

Regulatory bodies are responding to these systemic risks. The U.K.'s Financial Conduct Authority and the European Banking Authority now classify major cloud providers as critical third parties, subject to operational resilience requirements.

"This event exposes a critical blind spot in risk assessments—companies often underestimate the depth of their supply chain and cloud provider dependencies," said Dominic Green, cloud practice lead at Northdoor. "The outage revealed specific gaps in enterprise preparedness. Many CIOs focus contingency plans on classic disasters, hardware failure, cyberattacks or data center loss, yet often overlook the systemic vulnerabilities introduced by single-region reliance or untested failover strategies."

"Vendor lock-in typically refers to switching costs associated with proprietary APIs and data formats. The October AWS outage reveals a different dimension — reliability concentration," said Chirag Mehta. "When a single provider hosts most of an organization's workloads, that provider's availability becomes the ceiling for the organization's overall availability."

Technology leaders must address the following areas to build a resilient digital core: design for failure, test relentlessly, and make resilience a board-level conversation. While outages are unlikely to disappear, being resilient is even more important. "There is no reasonable way, no matter what governance structure is put in place, to prevent cloud outages on occasion," said Betsy Cooper.