But since a lot of companies relied on S3, many were impacted.

This is basically an extension of the unwise API craze: I think if you want to test an idea on an API, great. If you want to build a business on it, you’re screwed, because, well, shit happens. I covered this here, here and here.

The same goes for services like Feedburner, who many have used instead of developing in-house tools. I am not sure if this is a one-time blip or Google really just killed an otherwise useful feature. I’m not sure this is tantamount to Google being Evil, it’s that Google is a business and they are looking for monetizable growth.

The point is: companies really need to justify resources these days and going forward. Yes, the Web remains faster growing than any other media, but that’s specifically the problem: we need manpower to maintain let alone fine-tune services, so a company like Google will put resources where the revenue is. This is the same kind of problem Google faces at YouTube, something I covered last week.

A lot of startups are built as features and tools for larger companies. Specifically because a company like Google is hunting for revenue and won’t devote the resources to build something like Feedburner (pre-sale to Google) then a company like Feedburner comes to life. All this does, really, is create an opportunity for someone else to pick up the baton and fill the need.

In this context, I’m not sure if this means businesses won’t count on outside companies, I just think someone else will come and fill the gap.