I recently had the "good" fortune of being at the receiving end of a sales pitch from one cloud hosting service (not Amazon). The pitch centered more around flexibility (ability to add CPUs, RAM, storage, network nodes) rather than reliability issues as the one EC2 is facing right now. All questions about reliability were brushed aside with blanket statements like "it's in the cloud" as if that was an end-all-be-all. After much prodding the sales rep admitted that the hosting was all in one location (low lying hurricane prone area) and if we desired redundancy we would have to mirror our apps at a different geographical location. As with any other product, don't believe the sales pitch. If it sounds too good to be true, it probably is. Always use redundancy specially for critical apps.