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Law Suit Against Data Storage Company

As data storage and security moves online, expect to see more lawsuits like this one, by online storage service provider Carbonite, against a storage vendor. Carbonite contends that the vendor's $3 million hardware package did not perform as specified, causing data loss due to "physical drive errors and array errors." As a result, Carbonite claims that it lost backups of more than 7,500 customers in multiple incidents that caused serious damage to Carbonite. The company sued both the developer of the hardware system as well as the solution provider who sold the defective hardware. 

With many online storage companies or software-as-a-service providers still in their nascence, one small incident could severely damage their reputation and perhaps even shut them down permanently. Lawsuits such as those by Carbonite may enable companies to recover their damages, but restoring reputation is much more difficult.

Posted by Carolyn Elefant on March 26, 2009 at 03:16 PM | Permalink | Comments (3)


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