Cloud Disruptions Rise
Critical cloud outages rose by 18% in 2024, lasting nearly 19% longer than in 2023. Google Cloud experienced a 57% increase in downtime hours. Microsoft Azure improved, reducing downtime by over 20%. At the same time, Amazon Web Services (AWS) remained the most reliable among the top three providers. All this comes from Parametrix’s Cloud Outage Risk Report 2024 and could profoundly impact cyber insurance policies.
Some Key elements from the report.
Extended Cloud Downtime Events Surge
Six outages lasted over ten hours each in 2024, totaling nearly 100 downtime hours. These incidents had widespread business impacts across industries.
North America Hit Hardest
North America accounted for 60% of total downtime, maintaining its share from 2023. However, outages also disrupted businesses in Europe, Asia, and beyond.
Human Error Remains Leading Cause
Human mistakes accounted for 68% of all cloud service interruptions in 2024. This continues a trend observed in previous years, and the issue of human error pervades cybersecurity considerations.
Key Outages in 2024
Significant incidents included CrowdStrike’s global failure in July, AWS’s disruption in its US-EAST-1 region, and Google Cloud’s power failure in Frankfurt.
AI Boom Adds Pressure to Cloud Services
The rapid growth of generative AI increased demand for cloud services. The top three providers invested $82 billion in infrastructure in Q3 2024. This expansion drives innovation, but it also raises the risk of outages that impact business operations, not to mention customer trust and financial stability.
Cyber Insurance Industry Faces a Coverage Rethink
The July 19 CrowdStrike outage highlighted vulnerabilities in cyber insurance coverage. This event caused massive disruptions, affecting key industries like aviation and banking. Insurers now anticipate significant claims under business interruption policies.
S&P Global noted that this outage could prompt insurers to reconsider coverage for human-error-induced service failures. Historically, insurers included such coverage as a minor add-on, but rising claims may change this practice. Experts suggest that demand for broader coverage will push insurers to increase pricing and refine risk assessments.
The CrowdStrike failure was one of five major service provider incidents within four months. The insurance industry is now reassessing its risk models. Insurers are evaluating how human errors impact policy structures and whether changes are needed to prevent massive claims in future outages.
Jonathan Hatzor, CEO of Parametrix, emphasized that the incident underscores systemic risk in digital services. He stated, “Major incidents like the global CrowdStrike outage in July, AWS’s service disruption in the US-EAST-1 region, and Google Cloud’s power failure in Frankfurt highlight the growing systemic risks faced by enterprises dependent on digital supply chains.”
Comparing Cloud Outages to Everyday Life
Imagine relying on your car for daily commutes, only to find it won’t start 18% more often than last year. Some cars—like AWS—rarely break down. Others—like Google Cloud—suffer from more breakdowns, forcing drivers to scramble for alternatives. Meanwhile, mechanics (cloud engineers) continue making mistakes, causing 68% of these breakdowns. Businesses are left stranded, waiting for repairs.
Other News: CrowdStrike Outage Spurs Cyber Insurance Market Response: A Reporting Roundup(Opens in a new browser tab)
