This week’s service outage at Intuit is fueling a new round of speculation about the dark side of cloud computing—and whether businesses can depend on cloud-based services to run their businesses. Intuit’s problems come on the heels of other service outages this month at WordPress and Sage, as well as service outages earlier this year at Salesforce.com and NetSuite, among others.

Clearly, Intuit is not alone, and cloud vendors across the board will need to redouble their efforts to harden backup, continuity and disaster recovery services. Customers will also demand more transparent, accessible visibility into ongoing performance, downtime and problem resolution, and compensation when downtime exceeds guarantees in vendor service level agreements. And, as stated so well in a Hubspot blog, cloud vendors must put a proactive social media strategy in place to lessen the fallout when a problem does occur.

That said, I don’t think that customers should leap to the conclusion that the sky—or the cloud—is falling. Smaller companies, in particular, are likely to have much more trouble keeping their systems up, running and productive than a cloud provider.

However, it does seem to me that now is a good time for vendors and customers to consider a hybrid appliance-cloud approach—which has had a difficulty getting air time amidst the cloud hype and exuberance. As I discussed in What is a Business Applications Appliance and Why Should You Care?, business application appliances come pre-configured with all of the hardware and software components required to run a specific business application, such as accounting or CRM packaged together in one box. The appliance vendor pre-integrates the hardware, databases, security, storage, virtualization and other technologies with the business application to provide a complete solution.

This means that users can set up an appliance in a matter of minutes, instead of the hours or days it would normally take to source, install, integrate and tune all of these component parts on a general purpose server. And the appliance vendor (or a business partner) can deliver remote system management, monitoring, updates, patches, support and backup over the Internet, and deliver additional Web-based services, and/or download new applications as needed.

As a result, the appliance approach can bridge the gap between traditional, customer-premise deployments and cloud computing or software-as-a-service (SaaS) model, integrating on-premise, integrated appliance systems with cloud services. In many respects, this model could offer the best of both worlds to companies that want something easy to use and maintain, but are still uncomfortable with complete reliance on the cloud.

Let me know what you think–will recent cloud vendor outages shed new light on the appliance model?

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