Cloud outages expected to be the new normal in 2026

No one was spared from the cloud outages of 2025. With billions lost and customer trust shaken, enterprises are now rethinking their reliance on hyperscale providers. 

"As hyperscaler outages continue to make headlines, organizations are losing patience with 'all-in-one' cloud dependency," says Catalin Voicu, a cloud solutions engineer at N2W (formerly N2WS).

The cloud is a critical part of the global IT infrastructure and organizations have come to realize the fragility of centralized cloud infrastructure and how a single issue can cascade into multiple failures. 

While cloud outages were not considered routine, they have become an increasingly anticipated risk as organizations rely more heavily on a small group of hyperscale providers, thereby amplifying the vulnerability of critical IT infrastructure. Enterprises experienced numerous outages in 2025, including those from AWS, Microsoft Azure, Google Cloud and Cloudflare.  

One of the largest outages of 2025 was AWS, with over 17 million Downdetector reports and lasting over 15 hours. The single point of failure created service disruptions across various enterprises, including Netflix, Snapchat and numerous e-commerce sites. 

An outage is no longer a risk; it is a certainty. And that is not expected to change in 2026. 

The cost of downtime 

An outage can be devastating, as we saw on July 19, 2024, when a faulty CrowdStrike Falcon update caused millions of Windows systems to crash globally, resulting in the infamous "blue screen of death." Approximately 8.5 million Windows devices were affected, disrupting critical industries such as air travel, healthcare and financial services. The outage cost U.S. Fortune 500 companies an estimated $5.4 billion. 

In a survey conducted by Oxford Economics for Splunck's The Hidden Costs of Downtime report, it was calculated that downtime costs Global 2000 companies $400 billion annually. That equates to every minute of downtime costing an average of $9,000, or $540,000 per hour.  

And the effect of downtime doesn't end once the disruption is over. According to surveyed CFOs, it takes 75 days for revenue to recover. Following the incident, the stock price value drops an average of 2.5%. Companies must also contend with the negative effect on their brand and loss of customer trust.  

But this doesn't have to be the new normal. 

Will cloud outages get worse? 

Unfortunately, "these incidents weren't isolated -- they're a preview of what's to come," said Lee Sustar, principal analyst at Forrester.  

We believe this strategy will have some meaningful fallout in the form of at least two major multiday outages in 2026.

Building out AI-native cloud data centers is expensive and a current priority for US hyperscalers. These upgrades will not help with the widespread outage issue. 

"Hyperscalers are diverting investment away from legacy x86 and ARM environments, prioritizing GPU-centric data centers for AI workloads while aging infrastructure falters under growing complexity. We believe this strategy will have some meaningful fallout in the form of at least two major multiday outages in 2026," said Sustar. 

Is it time for a new cloud strategy? 

With outages expected to continue, it might be time for businesses to explore new strategies to safeguard their operations. 

"2026 will accelerate a shift toward smaller, regional clouds and multi-cloud strategies," said Voicu.  By distributing workloads across multiple cloud providers, companies can loosen vendor dependencies and ensure that no single point of failure can disrupt operations. Additionally, multi-cloud strategies often span different regions and data centers, which reduces the risk of downtime caused by localized issues, such as natural disasters or regional outages. Voicu expects organizations to look to secondary, lesser-known cloud providers as hidden backups, creating a "shadow cloud" layer.  

"Hyperscalers will feel the pressure, scrambling to reassure customers with aggressive marketing campaigns, new reliability guarantees and promises of ironclad SLAs," Voicu said. 

However, such promises might be too little, too late as other options become available. Voicu expects "invisible" cloud architectures will increase in which workloads will automatically failover across different providers, regions and private clouds. With the assistance of AI tools, outages will become more predictable, and these tools can reroute traffic and data in real time. 

Kathleen Casey is the site editor for SearchCloudComputing. She plans and oversees the site, and covers various cloud subjects including infrastructure management, development and security.