I’d be remiss not to mention the Windows Azure Downtime on Leap Day. Because of my employment at Microsoft I won’t speculate or say too much on the situation. I have said before that cloud computing does not completely alleviate the risks of downtime.
I would like to reiterate that there are always inherent risks in building and running software, and failure is to be expected not avoided. The best designed systems are set up for failure, and can handle these cases with grace. This particular event with Windows Azure further highlights the need to design applications that sit on top of any infrastructure (traditional, cloud, or hybrid) in such a way that they can work when (not if) a major portion of the infrastructure fails.
Don’t be fooled into thinking that any cloud service provides a silver bullet to resiliency. Outsourcing your IT infrastructure to a cloud provider greatly improves your resiliency to for the cost you have to pay; most of us cannot afford to build & maintain a fault tolerant world-wide infrastructure. When a failure does occurs, don’t overlook the economies of scale that benefit the application tenants most of the time when things are working properly.