"They can just turn up a new instance of a cloud application"
Whoosh!, there goes the credibility of the whole scheme.
Another instance of an application is not going to help when the bandwidth is not coming through.
And I'm not talking about hardwired kit. This whole cloudy thing is very, very decentralized now and people want to access it with mobile kit. Mobile kit currently depends on 3G for data connections, and 3G is shitty as hell quite often.
Don't get me wrong, when it works, it works fine. But when you're in a 3G hole, you get nothing. Another "instance" of your application is not going to help there.