iSAT demands R21 billion in damages from Dimension Data

Internet service provider iSAT has posted details of a dispute between it and Dimension Data regarding a major system failure that occurred in March 2019.

According to iSAT, Dimension Data (formerly Internet Solutions) effectively admitted to gross corporate negligence by running completely outdated software on its Consumer Virtual Machine (CVM) platform.

Internet Solutions, which has since been subsumed into Dimension Data, experienced a multiple hard drive failure in its CVM platform on 18 March 2019.

Details of the incident began to appear online when customers posted their complaints about having problems with the service for over a week.

The service was restored after two weeks of downtime, but Internet Solutions said at the time that there were some problems reinstating customer data.

“Regrettably, a portion of data could not be reinstated to a consistent state – i.e. attaching the data back to the original virtual machines,” the company said at the time.

Internet Solutions said the data was still available, but clients would need to contact it to retrieve their information.

“The data still exists within the environment and we have advised affected clients of the alternative methods to retrieving their data,” Internet Solutions said.

Total data loss

However, iSAT said that it experienced total data loss.

“Owing to gross corporate negligence, Internet Solutions/Dimension Data lost key iSAT business data, including data from a project that iSAT had been working on for more than 4 years, and was about to be released nationally and internationally,” iSAT stated.

“Due to the loss of historical data the entire project had to be cancelled. The project needed the historical data, gathered over years, for predictive analysis. A core part of the base product to be released.”

iSAT said it contacted Internet Solutions to request an explanation and compensation for the loss.

Through its communications with Internet Solutions over the past year, iSAT said it was informed that Internet Solutions’ CVM service was running on an extremely outdated version of OpenStack platform.

According to iSAT, Internet Solutions stated on 3 May 2019 that it was using the Icehouse version of OpenStack when CVM crashed.

The Icehouse version of OpenStack entered its “end-of-life” phase on 2 July 2015.

“End-of-life” means that this version of the OpenStack platform was no longer being maintained. According to iSAT, OpenStack users are generally encouraged to upgrade before the version of the software they are using is declared end-of-life.

iSAT said that the fact that Internet Solutions was still using the Icehouse version of OpenStack in March 2019 means that the company had not been properly maintaining its CVM platform.

Legal action

iSAT said that Dimension Data’s attorneys have threatened to go to the high court to get an interdict to force it to take down the website wherein it gives its account of the dispute with Internet Solutions, and to stop iSAT from sending out a press release.

iSAT stated that it will serve a summons on Dimension Data and that it is absolutely confident of winning its case in the high court of South Africa.

Dimension Data said in a statement that iSAT has demanded R21 billion in damages, but that the company failed to substantiate its claim when afforded an opportunity to do so.

“Since September 2019, Internet Services and Technologies (iSAT) has engaged Dimension Data in numerous threatening correspondences regarding a service outage that had taken place six months earlier in March 2019,” Dimension Data said.

Given iSAT’s demand for R21 billion in damages, Dimension Data said that it got legal counsel, Eversheds Sutherland, who advised that there was and is no merit whatsoever iSAT’s claims. As a result, Dimension Data has at all times denied any potential liability.

“As far back as 30 September 2019, [iSAT CEO Rory Pearton] has advised that he intends instituting legal action, but has to date not done so. Instead, he has continued with a series of threatening, defamatory and blatantly untrue correspondence, in which he has now made threats to Dimension Data’s reputation, claiming that he will make use of social media as a means to force Dimension Data to enter into ‘settlement negotiations.'”

Dimension Data said that as a result of Pearton’s escalating threats, its attorneys sought to institute a cease and desist from further defamatory claims and continued harassment.

“On 25 September 2020, Dimension Data obtained a written undertaking from Mr Pearton’s attorneys in which he undertook to desist from, inter alia, publishing threatening, defamatory and factually untrue information about Dimension Data,” the company stated.

“However, shortly after agreeing to this course of action, Mr Pearton resumed his unlawful conduct including publishing a public account of what he believes this situation to entail. As a result of this breach of undertaking, Dimension Data has now been compelled to institute a High Court application to enforce Mr Pearton’s undertaking and interdict him from persisting with his ongoing conduct.”

Now read: Dimension Data to cut 480 jobs

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iSAT demands R21 billion in damages from Dimension Data