Cloud services operated by Amazon Web Services (AWS) in the Gulf region continue to face disruptions more than ten days after drone strikes damaged data centre infrastructure, raising concerns about the reliability of critical digital systems in an increasingly volatile geopolitical environment.
“The recent AWS disruptions were a reminder that even the most advanced digital infrastructure ultimately relies on physical systems that can be affected by real-world events. Like many organizations in the region, we experienced temporary operational hurdles like limited access to payment portals and delays in certain cloud-based tools, which required quick internal coordination and contingency planning, dragging the process into a more manual one,” Aline de Albuquerque Pereira, Founder of PR agency THE SOLUTION UAE, tells TRENDS.
The disruption also created operational challenges for small businesses dependent on digital government and banking systems.
“My marketing agency is registered with Ajman Free Zone, and their systems were recently impacted due to issues with AWS servers. We were notified that the portal would be down, but there was no clear indication or timeline on when it would be restored,” says Nimrah Khan, Director of Marketing and Communications at Kollab Digital.
“Because of this, I was unable to download or access my updated license from the portal. While waiting for the system to come back online, WIO temporarily suspended my business banking since the document could not be uploaded,” she explains.
“Situations like this highlight how dependent small businesses have become on centralized digital infrastructure, and how outages beyond our control can quickly translate into operational and financial disruption,” Khan adds.
Facilities operated by AWS, the cloud division of Amazon, in the United Arab Emirates and Bahrain were hit during the beginning of the US-Israel and Iran conflict, causing structural damage, power disruptions and connectivity failures that affected customers across sectors.
The company has indicated that the physical nature of the damage — including infrastructure impact and secondary effects such as fire suppression — has made recovery slower than typical cloud outages, which are usually caused by software or networking failures.
Unusual outage due to physical damage
Unlike routine technical disruptions that are often resolved quickly, the Gulf incident involved direct physical impact to infrastructure, making restoration dependent on engineering repairs and operational conditions.
Industry experts say such incidents demonstrate that cloud infrastructure, despite its digital nature, ultimately depends on physical facilities vulnerable to real-world risks.
Echoing this view, Lohith Atchirthi, an engineer from Hyderabad, noted in a LinkedIn post: “It highlights a new reality for tech expansion. Companies are pouring billions into data centers globally to fuel AI and cloud growth. But physical infrastructure in geopolitically volatile regions carries tangible risks.”
“The promise of the cloud is abstraction—your data and apps exist everywhere and nowhere. But the servers are very much somewhere. And sometimes, somewhere can become a target,” Atchirthi adds.
“This forces a conversation beyond uptime percentages. It’s about geography, politics, and the physical security of our digital foundations. Are we adequately pricing in these new dimensions of risk as we build the next generation of global tech infrastructure?”
Growing dependence on hyperscale cloud
According to industry estimates, AWS remains the world’s largest cloud provider, with about 30–32% of global cloud infrastructure market share, followed by Microsoft Azure and Google Cloud, based on data from Synergy Research Group.
The disruption has again highlighted how deeply businesses now depend on a small number of hyperscale cloud providers.
Research firm Synergy Research has estimated that the three largest cloud providers — AWS, Microsoft and Google — together account for roughly two-thirds of global cloud infrastructure spending, underscoring concentration risks in the sector.
Technology companies have been investing heavily in the Gulf as countries seek to position themselves as artificial intelligence and digital economy hubs. Firms such as Microsoft, Google and Oracle Corporation have expanded their regional presence in recent years.
Financial and business risks
The outage reportedly affected digital platforms and financial services dependent on AWS infrastructure, illustrating the cascading risks when cloud services fail.
Financial disclosures show AWS remains Amazon’s main profit engine. The company reported about $128.7 billion in AWS revenue in 2025 and roughly $45.6 billion in operating income, accounting for more than half of Amazon’s total operating profit.
Based on these figures, AWS generates an estimated $350 million in daily revenue, highlighting the scale of economic activity dependent on uninterrupted cloud operations.
Analysts say such incidents could push enterprises toward multi-region or multi-cloud strategies to reduce dependence on a single provider.
“The ‘cloud is always available’ assumption just got shattered. Multi-region redundancy and disaster recovery plans aren’t just best practices anymore; they’re survival strategies. Any organization running production workloads in a single region, especially in geopolitically sensitive areas, needs to seriously revisit their architecture,” says Brown Samita, SOC Analyst and cloud security professional on LinkedIn.
Changing risk calculations
Experts say the incident could also influence how investors and enterprises assess risk in cloud infrastructure, especially in regions exposed to geopolitical tensions.
Historically, even major cloud outages — including AWS disruptions in 2017, 2021 and 2023 and outages affecting Microsoft Azure and Google Cloud — have had limited long-term impact on market valuations, as investors typically view them as operational rather than structural risks.
However, analysts note that incidents involving physical damage could change that perception if they become more frequent.
“The cloud often feels abstract. But it is still buildings, power, cables, and geography. Events like this remind us that resilience cannot stop at multi-AZ design. If a region becomes the failure domain, the blast radius grows very quickly,” says Shantanu Bakare, a cybersecurity leader and cloud infrastructure specialist in a LinkedIn post.
Strategic infrastructure in modern conflicts
The incident reflects a broader evolution in modern conflict, where digital infrastructure may increasingly be viewed as strategic assets.
Data centres today support everything from banking transactions to AI computing and government services, making them as critical as traditional infrastructure such as energy facilities.
“This incident highlights something many organizations still underestimate. The greatest risks in modern digital infrastructure are no longer limited to software vulnerabilities or cyber intrusions. They increasingly involve physical disruption of critical infrastructure,” says Marius Barczak, Senior Cybersecurity Architect in a LinkedIn post.
“When a single regional data center event can disrupt over 100 services, it becomes clear that cloud resilience is not only a cybersecurity issue — it is an architectural and geopolitical challenge,” he adds.
As restoration efforts continue, the AWS disruption may serve as a warning for both governments and corporations that resilience planning must now account not only for cyber threats but also for physical and geopolitical risks.
The episode is also likely to accelerate investments in redundancy, backup regions and hardened infrastructure as cloud providers seek to reassure customers about long-term reliability.