Storm clouds roll over the Dam Neck area of Virginia Beach, Va., on Monday, June 25, 2012. (L. Todd Spencer/AP)

Some of the Web’s most prolific companies — Netflix, Instagram, Pinterest — were knocked offline for hours at a time when a storm hit an Amazon cloud computing facility in Virginia. This marked the second big failure at Amazon Web Services in just the past two months. Not only that, but companies such as Foursquare and Reddit were knocked out by a glitch called the Internet Leap Second.

But here’s the bigger question: When we’re exponentially adding to the amount of data on the Internet every few days and companies can get to a million customers almost overnight, how prepared are we for the next era of near-ubiquitous computing?

Of all the metaphors and analogies used to describe the Internet, perhaps none is less understood than “the cloud.” A term that started nearly a decade ago to describe pay-as-you-go computing power and IT infrastructure-for-rent has crossed over to the consumer realm. It’s now to the point where many of the Internet’s most prolific companies make it a key selling point to describe their embrace of the cloud. The only problem, as we found out this weekend, is that there really isn’t a “cloud” – there’s a bunch of rooms with servers hooked up with wires and tubes.

While it’s easy to assign blame to Amazon or “cheapo” companies wanting low-rent computing power, the type of cheap, readily available computing power made available via companies such as Amazon played a significant role in fueling the current Web boom. Here’s why: Instead of having to devote resources and time to figuring out the computing back-end, young Internet companies like Instagram and Pinterest could concentrate on hiring the right people and developing business models worth billions. Hooking up to the Internet became as easy as plugging into the local electricity provider, even as users uploaded millions of photos or streamed millions of videos at a time.

No wonder companies like Google want in.

Just days before the embarrassing cloud glitch over the weekend, Google announced a new Google Compute Engine that claimed to do everything Amazon could do, but at an even lower price.  And it’s not only Google – nearly every major tech company has embraced “the cloud” to some degree. It’s just a fact of life that we’re generating so much data, that everyone’s looking to turn over their power and storage needs to the companies that can best handle it.

As The Washington Post’s Vivek Wadhwa warned at the end of last year, the chance of a major "cloudburst" this year has become a likely scenario, just due to the sheer amount of data and information being stored in server rooms around the nation. After all, it’s not just companies such as Instagram and Netflix that are using the cloud, it’s thousands of companies just like them as well. As computing power becomes increasingly ubiquitous, as we attach more gadgets and devices to the cloud, and as we store even more data in the cloud, companies will only increase their computing needs.

A temporary glitch while watching a Netflix movie is annoying, imagine what happens when there’s a cloud outage that affects airports, hospitals, or yes, the real-world utility grid. Maybe the late Alaska Republican Senator Ted Stevens was right – maybe the Internet really is a series of tubes rather than a cloud. If so, the company with the best plumbing wins.

Dominic Basulto is a digital thinker at Bond Strategy and Influence (formerly called Electric Artists) in New York. Prior to Bond Strategy and Influence, he was the editor of Fortune’s Business Innovation Insider and a founding member of, one of the Web’s first blog media companies. He also shares his thoughts on innovation on the Big Think Endless Innovation blog and is working on a new book on innovation called “Endless Innovation, Most Beautifuland Most Wonderful.”

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