On Sunday morning, Amazon's S3 cloud storage service went down for the second time this year, disrupting a multitude of applications hosted by the company. While some downtime can be expected for an online service, S3's was excessive, with some applications being inaccessible for as long as eight hours. With that second outage, Amazon has effectively put a damper on cloud computing. How many IT departments will use Amazon's shortcomings as an argument to avoid hosted services or cloud computing of any type? One has to wonder how something like this could happen--doesn't Amazon use fault-tolerant hardware, mirrored storage and the like?

For the channel, there is a silver lining to Amazon's storage cloud and that comes in the form of selling offline redundancy solutions for those using Amazon's services, or better yet, replacing S3 with in-house hosted storage, effectively moving the cloud to inside of the firewall.

Of course, the appeal for S3 will remain, despite its failures. S3 proves to be cheap and easy to administer, two factors that will keep interest in the service going. Either way, solution providers can turn S3's failures into additional opportunities.