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This work investigates feasibility issues that must be addressed when threshold-based mechanisms are to be used for diagnostic purposes in COTS-based distributed systems. Threshold based mechanisms have typically been used for such purposes in embedded systems. A variety of solutions exist, with different characteristics of completeness, accuracy, and induced overhead. We first discuss the challenges related to applying such mechanisms to COTS-based distributed applications. We then identify alternative strategies for diagnosis, which use run-time data on COTS component service failures to trigger alarms to reconfiguration and fault treatment mechanisms. We implement those strategies in a system prototype, which is based on a substantial application, i.e. a real world (as opposed to a toy) application. We discuss the relationships between the sensitivity of the quality of service (QoS) provided by the diagnostic mechanisms and the accuracy of the available failure data. Our considerations and preliminary experiments on the prototype suggest that a careful evaluation of tradeoffs must be conducted, in order to achieve the best compromise between accuracy and cost, which depends on application characteristics, and service deployment requirements.