Dimension Data moves to gag ISP over ‘failed’ IT project claims

Dimension Data is involved is an ugly fight with Internet service provider (ISP) Internet Services and Technologies (iSAT) over a “failed” IT platform implemented by the systems integrator.

The ISP is, therefore, looking to be compensated by Dimension Data as a result of the failed IT project.

However, Dimension Data says it cannot fork out a “R21 billion damage claim” that iSAT is demanding, as the figure is “unsubstantiated”. Dimension Data has at all times denied any potential liability, it adds.

iSAT alleges it had been using one of Dimension Data’s (previously Internet Solutions) cloud-based solutions since the middle of 2014.

According to Rory Pearton, CEO of iSAT, Dimension Data’s implementation of a product called OpenStack was marketed as CVM.

OpenStack is a free open standard cloud computing platform, mostly deployed as infrastructure-as-a-service in both public and private clouds where virtual servers and other resources are made available to users.

“Unfortunately, in March 2019, the cloud-based solution based on a world-class product known as OpenStack failed catastrophically. iSAT lost key business data that was duplicated over multiple cloud instances,” he says.

Pearton explains that OpenStack competes with the likes of Microsoft Azure, Google Cloud and Amazon Web Services.

“Before iSAT started using CVM, Dimension Data also confirmed it was a world-class cloud-based system,” he says, providing links with the alleged correspondence from Dimension Data. (Some of the links are embedded below.)

“As far as iSAT knows, no customer data has ever been lost by Microsoft, Google or Amazon on their cloud systems, not to mention multiple failures of their server instances causing mass data loss, such as what occurred on Dimension Data’s cloud-based CVM platform.”

Pearton notes that OpenStack is a world-class solution used by companies such as Walmart, CERN, Cathay Pacific, SkyTV and many others.

He adds that after the failure, Dimension Data admitted it had not maintained the CVM solution for more than four years, and that the OpenStack operating system was over four years past its end of life.

“Unfortunately, instead of accepting responsibility, they tried to deny any wrongdoing. In iSAT’s opinion, Dimension Data has also tried to cover up its terrible failings.

“Due to the catastrophic failure, a project that iSAT had been working on for more than four years had to be scrapped because the historical data collected for analysis and predictive purposes was lost.

“iSAT had done its due diligence in keeping multiple copies of the key data stored on multiple CVM instances; all this data was irretrievably lost.”

Without giving a figure, Pearton points out that the scrapping of this project has led to “substantial financial losses” for iSAT.

In a statement to ITWeb, Dimension Data says since September 2019, iSAT has engaged Dimension Data numerous times, with threatening correspondence regarding a service outage that had taken place six months earlier in March 2019.

According to the systems integrator, this included an “unsubstantiated demand from Pearton’s attorneys for in excess of R21 billion in damages”.

Given this, it notes, Dimension Data sought the guidance of legal counsel, Eversheds Sutherland, which advised there was and is no merit whatsoever in Pearton’s claims.

As a result, the company says, Dimension Data has at all times denied any potential liability.

“Dimension Data, nevertheless, continued to engage with Mr Pearton and his attorneys in good faith, which culminated in a meeting in the presence of the attorneys on 2 December 2019 in an effort to address concerns. There was no resolution at that time.

“Notwithstanding Dimension Data’s continued belief that there is no liability on its part, Mr Pearton was afforded the opportunity to substantiate his claim for R21 billion but was unable to do so.

“It is worth noting that Mr Pearton has subsequently advised that the amount claimed would increase every time Dimension Data’s attorneys ‘irritated’ him.”

Dimension Data adds that as far back as 30 September 2019, 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’.”

The systems integrator notes that as a result of these continued and escalating threats, Dimension Data’s 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.

“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,” says the company.

Meanwhile, Pearton’s points out that iSAT also informed Dimension Data’s holding company NTT of the situation on 2 and 7 September 2020.

“No response has been received from NTT to date. iSAT hopes that Dimension Data’s culture of lack of responsibility does not extend into NTT, and its substantial list of subsidiaries worldwide.”