Relying on a single cloud provider can cause multiple critical services to become inaccessible if that provider experiences an outage.
October 20, 2025
high
risk
Operational risk associated with centralized cloud-dependency and lack of provider diversification.
Using large, centralized cloud providers offers convenience and strong cybersecurity protections, but concentrating infrastructure and data with a small number of providers creates systemic dependency risk if those providers experience outages.
October 20, 2025
high
risk_assessment
General trade-off between convenience/security and concentration risk when firms use major cloud providers.
Many businesses have outsourced their data center operations to large cloud providers because outsourcing is generally more cost-effective and operationally efficient than maintaining private data centers.
October 20, 2025
high
economic
Outsourcing to cloud providers reduces capital and maintenance burdens associated with running private infrastructure.
Centralization of cloud infrastructure creates systemic 'centralization risk' in which failures at a single cloud provider can cause simultaneous outages across many dependent companies and services.
October 20, 2025
high
risk
When many services rely on the same underlying provider, a provider-level failure can cascade to numerous customers.