An expo hall at AWS's re:Invent conference in Las Vegas on December 1. AP
An expo hall at AWS's re:Invent conference in Las Vegas on December 1. AP
An expo hall at AWS's re:Invent conference in Las Vegas on December 1. AP
An expo hall at AWS's re:Invent conference in Las Vegas on December 1. AP

Quicktake: Why did AWS crash again and will there be more cuts?


Alkesh Sharma
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Amazon Web Services, the backbone of many websites and apps, suffered a major disruption in the US and in some other parts of the world on Wednesday, disrupting millions of online platforms.

The latest failure hit AWS just a week after the company suffered a major outage that knocked hundreds of websites offline in one of the worst breakdowns the company has faced.

The National looks at the possible snags causing the frequent blackouts and explores the potential solution.

What is AWS?

AWS is one of the world’s most comprehensive and broadly adopted cloud platforms that offers more than200 services from data centres globally. It stores its customers’ data, runs their online operations and helps them to lower overall business costs, thereby becoming more agile and able to innovate faster.

AWS – which competes with the likes of Microsoft Azure, Google Cloud, Oracle Cloud and others – has 84 data centres in 26 locations around the world. It plans to launch 24 more data centres in Australia, India, Canada, Israel, Spain, Switzerland, New Zealand and the UAE in the coming months.

AWS has 84 data centres in 26 locations around the world. Getty Images
AWS has 84 data centres in 26 locations around the world. Getty Images

What caused the outage?

The disruption, which lasted more than 90 minutes, was a result of a technical error that sent huge loads of data to the core network. It is still not clear whether it was a human mistake or a technology glitch.

The issue was caused by “network congestion” between parts of the AWS platform and the internet service providers.

“Traffic engineering incorrectly moved more traffic than expected to parts of the AWS backbone that affected connectivity to a subset of internet destinations,” AWS said.

The company said the issue has been resolved and it does not expect a recurrence.

What led to AWS failing?

In the past, industry experts cautioned against the presence of only a handful of companies in the burgeoning cloud market.

The latest AWS crash is a “prime example” of the threat of centralised network infrastructure, said Sean O’Brien, a visiting lecturer in cyber security at Yale Law School.

There is a need for businesses to adopt multi-cloud strategies – using services across different cloud computing providers – and reduce their reliance on a single service provider to ensure a single outage does not close their operations in one go.

Forrester analyst Brent Ellis said a multi-cloud strategy will help companies side-step big web outages.

“It’s a decision large enterprises have to make or they’ll inevitably be in a situation where they’re down for several hours,” he told Bloomberg.

How big is AWS?

AWS posted more than 38 per cent annual growth in revenue in the third quarter that ended on September 30. It earned $16.1 billion, accounting for almost 15 per cent of the parent company Amazon’s overall sales in the three-month period.

In the last financial year, the cloud computing platform generated sales worth $45.4bn, almost 12 per cent of the company's total revenue of more than $386bn.

It captured about one third of the $152bn cloud services market, securing a bigger cut than Microsoft and Google combined, according to a report from the Synergy Research Group.

Has AWS crashed before?

A major interruption hit Amazon’s cloud services on December 7, temporarily knocking out streaming platforms Netflix and Disney+, Robinhood, a wide range of apps and Amazon's e-commerce website. The company said it was probably caused by issues related to the application programming interface, a set of protocols for building and integrating application software.

AWS plans to open three data centres in the UAE in the first half of next year to tap into the burgeoning demand for cloud services in the country. Reuters
AWS plans to open three data centres in the UAE in the first half of next year to tap into the burgeoning demand for cloud services in the country. Reuters

The Seattle-based company also faced a multi-hour blackout in November last year that affected a large portion of the internet.

There have been outages involving other technology companies as well.

It October, Meta – previously known as Facebook – suffered a nearly six-hour breakdown – along with its associated services WhatsApp and Instagram.

In June, American cloud computing services provider Fastly went down, which affected websites including Amazon, Reddit, The New York Times and the UK government website.

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History's medical milestones

1799 - First small pox vaccine administered

1846 - First public demonstration of anaesthesia in surgery

1861 - Louis Pasteur published his germ theory which proved that bacteria caused diseases

1895 - Discovery of x-rays

1923 - Heart valve surgery performed successfully for first time

1928 - Alexander Fleming discovers penicillin

1953 - Structure of DNA discovered

1952 - First organ transplant - a kidney - takes place 

1954 - Clinical trials of birth control pill

1979 - MRI, or magnetic resonance imaging, scanned used to diagnose illness and injury.

1998 - The first adult live-donor liver transplant is carried out

Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

Updated: December 17, 2021, 12:04 AM