June 15, 2011 | Mark Paradies

Unexpected Power Failure Costs RackSpace $3.5 Million in Refunds

When the reliability of your “cloud” depends on a server farm’s power, a power outage can be a major incident.

If you are a web hosting service, unreliability can cost you customers. To try to keep your customers, you give refunds when a service outage happens. RackSpace announced in an SED filing that it will pay $3.5 million in refunds (service credits) due to a recent loss of service after a power problem and failure of back-up power.

So even in the “cloud”, equipment and power reliability are important.

What can we learn? That root cause analysis is important in all sorts of industries. Repeat problems (this isn’t the first power reliability issue) cause unhappy customers. Better to solve reliability problems the right way by addressing their root causes.

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