As the dust was settling and the IT media echo chamber was polishing off the federally mandated outrage/contrarian outrage quota for all kerfuffles involving Anything 2.0, more outages struck, including a Blogger outage that no one in IT really cared about, although this reporter was outraged that it temporarily spiked a favorite blog.

While nobody was caring about Blogger, Microsoft’s hosted (cloud) Exchange and collaboration platform, Business Productivity Online Services (BPOS, now a part of Office 365) went down, which people in IT most assuredly did care about. Especially, as many of the forum posters said, if they had recently either been sold or sold their organization on “Microsoft cloud” as a preferable option to in-house Exchange.

“I’ve been with Microsoft online for two weeks now, two outages in that time and the boss looks at me like I’m a dolt. I was THIS close to signing with Intermedia,” said one poster. That’s the money quote for me; Intermedia is a very large hosted Exchange provider and this (probably) guy was torn between hosted Exchange and BPOS. Now he feels like he might have picked wrong: notice he didn’t discuss the possibility of installing on-prem Exchange, just two service options.

Microsoft posted a fairly good postmortem on the outage in record time, apparently taking heed from the vicious pillorying AWS got for its lack of communication (AWS’ postmortem was also very good, just many days after the fact):

“Exchange service experienced an issue with one of the hub components due to malformed email traffic on the service. Exchange has the built-in capability to handle such traffic, but encountered an obscure case where that capability did not work correctly.”

Anyone who’s had to administer Exchange feels that pain, let me tell you. It also tells us BPOS-S is using Exchange 2000 (That is a JOKE, people).

What ties all these outages together is not their dire effect on the victims. That’s inconsequential in the long term, and won’t stop people from getting into cloud services (there are good reasons to call BPOS cloud instead of hosted application services but that’s another blog entirely). It’s not the revelation that even experts make mistakes in their own domain, or that Amazon and Microsoft and Google are largely still feeling their way around on exactly what running a cloud means.

It’s the communication. If anything could more clearly delineate “cloud service” from “hosted service,” it’s the lack of transparency, lack of customer touch, and the unshakeable, completely relative perception of users across the board, that when outages occur, they are on their own.

Ever been in a subway car and the power dies? I grew up in Boston, so that must have happened hundreds of times to me. People’s fear and unease grow directly proportional to the time it takes the conductor to yell out something to show they’ve got the situation in hand. Everything is always fine, the outage is temporary, no real harm done, but people only start to freak when they get no assurance from the operator.

Working in IT and having a service provider fall over is the same thing, only you’re going to get fired, not just have a loud sweaty person flop all over you in the dark (OK, that may happen in somea lot of IT shops). Your boss doesn’t care you aren’t running Microsoft’s data center; you’re still responsible. Hosters have learned from long experience that they need to be, or at least provide the appearance of, being engaged when things go wrong, so their users can have something to tell their bosses. I used to call up vendors just to be able to tell my boss I’d been able to yell at “Justin our engineer” or “Amber in support” and relay the message.

Cloud hasn’t figured out how to address that yet; either we’re all going to get used to faceless, nerve-wracking outages or providers are going to need to find a way to hit that gap between easy, anonymous, economical and enterprise ready.

SimpleCDN went dark for the majority of its customers on Saturday, Dec. 11, followed by an angry, terse explanation from Frank Wilson, senior engineer for SimpleCDN. He said that his company had been summarily booted from its hosting infrastructure at Texas-based SoftLayer, which does dedicated and cloud hosting in three locations in the U.S. SimpleCDN had bought SoftLayer from a reseller called 100TB.com, a subsidiary of the UK2 group. Customers are being pushed to a competitor.

100TB.com offered unlimited, unmetered, network access and did not charge extra for it, as do most hosting providers, claiming you could use up to 100 TB of transit every month and still only pay roughly average VPS hosting costs, ($600 per month of a decent quad-core server).

“I think they were doing about 30 GBps sustained at the end,” mused Jason Read, professional cloud watcher at CloudHarmony. Read recapped that SimpleCDN was doing business with a second-tier hoster at a level most people would consider a full-on DDOS, all day, every day. Read also added that SimpleCDN was able to offer their bargain prices based on 100TB.com’s marketing. “[SimpleCDN] was kind of milking that 100 TB unlimited bandwidth offer and I think SoftLayer told UK2 they had to amend their terms,” said Read.

That may have happened, of course. SimpleCDN’s Wilson states that he thinks that SoftLayer was getting massively undersold on its own CDN business, which is much more expensive than SimpleCDN, or that they were getting slammed by his booming business.

“…our best guess currently is that these organizations could not provide the services that we contracted and paid for, so instead they decided that terminating services would be the best solution for them,” he said.

Of course, CDN services are an incidental part of SoftLayer’s hosting business, probably a tiny percentage of its revenue; something they offer because they can or because customers are asking for it. Many hosters do the same and consider it a value add rather than a critical part of the business. Same with UK2 — they were reselling Akamai as a CDN offering. In the CDN market, there’s Limelight and Akamai, and then there’s everyone else. SoftLayer also lives in Dallas, one of the world’s hubs for Internet connectivity. If they were running out of bandwidth, they could simply buy more and sell it to the UK2 Group. If anyone was getting killed in this deal it was UK2, the middleman.

What led to UK2 terminating SimpleCDN was the nature of the traffic it served. SimpleCDN hosted a lot of live video streams, and anyone who’s taken even a cursory look into it knows that there is a booming business in streaming pirated content to U.S. audiences; some Web communities have users that will post entire seasons of a TV show or movies to an online service for anyone to watch for free, unauthorized marathons that entertainment companies take a very dim view of.

CDNs know this, of course, and “monitor” their networks by pulling streams when they get a DMCA takedown notice, which doesn’t mean a thing to the 99 other pirate streams going at the same time. SimpleCDN even had an automated DMCA action form. Somebody out there got sick of playing whack-a-mole with SimpleCDN and went straight to the provider of record, SoftLayer.

SoftLayer would not comment officially for this story except to say that SimpleCDN was not their customer but rather UK2’s and they had no commercial relationship with SimpleCDN. However, they are still the ones hosting all this content and it can be assumed they got a DMCA notice, which they are going to take VERY seriously, because unlike UK2 or SimpleCDN, they have actual physical infrastructure and assets. They would have gone to UK2 and said, “We are holding you responsible for this.” Wilson’s letter says that UK2 accused him of content violations and changed their Terms of Service (ToS) on the fly to put him in violation.

Why did 100TB/UK2 change the rules of the game, instead of duly passing along SoftLayer’s DMCA, as they should have done? SimpleCDN was murder on their bottom line. Their “free bandwidth” offer was a fiction when put to the test. SimpleCDN took them at face value, ran hundreds of servers and hosted thousands of terabytes of data with them, but it was gone in a flash, because it was based on a false economic premise and shady marketing.

So the lesson for cloud is two-fold: one is “too good to be true” usually is. If SimpleCDN had started directly with SoftLayer, it would have had to pay those bandwidth costs and its prices wouldn’t have been so attractive. Likewise, the DMCA issues would have had one less hop.

Second, for the business user, it’s a new wrinkle in vetting a service. Popular online services haven’t been known to pop like a soap bubble and vanish overnight, taking massive amounts of data with them; that’s the province of shady warehouse distribution operations and basement stock brokerages. Now they do, fueled by the explosion of middlemen and easy access that drives cloud computing. It’s not enough to examine whether a provider is sound; you have to make sure you understand who they rely on too.

UPDATE: Both UK2 Group and SimpleCDN were contacted by phone and email for this article but neither responded by press time.