iSAT, Dimension Data in ugly dispute after cloud system ‘failure’

Internet service provider iSAT South Africa is embroiled in an ugly dispute with Dimension Data — specifically, its former division, Internet Solutions — with iSAT accusing the company of causing it severe financial and reputational harm over a failed cloud system.

Dimension Data, in turn, has denied liability and is now headed to the high court to seek to stop iSAT and its CEO, Rory Pearton, from what it said amounts to defaming of its name in public.

iSAT said in a statement e-mailed to TechCentral on Monday that it had been using Internet Solutions’ cloud-based offering, called CVM, since 2014.

“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,” it said.

“After the failure, Dimension Data admitted that they had not maintained their CVM solution for more than four years, and that the OpenStack operating system was over four years past its end of life,” said Pearton in the statement.

“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.”

Scrapped

As a result of the system failure, a project that iSAT had been working on for more than four years had to be scrapped, Pearton claimed. He said this was because the historical data collected for analysis and predictive purposes was lost. “Scrapping of this project has led to substantial financial losses for iSAT.”

But Dimension Data is having none of it. In a statement in response to iSAT’s media release, the IT services group said: “Since September 2019, iSAT has engaged Dimension Data in numerous threatening correspondences regarding a service outage that had taken place six months earlier in March 2019. Included in this was an unsubstantiated demand from his (Pearton’s) attorneys for in excess of R21-billion in damages.

“Given this, Dimension Data sought the guidance of legal counsel, Eversheds Sutherland, who advised that there was and is no merit whatsoever in Pearton’s claims. As a result, Dimension Data has at all times denied any potential liability,” it said.

“Dimension Data nevertheless continued to engage with 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, Pearton was afforded the opportunity to substantiate his claim for R21-billion but was unable to do so. It is worth noting that Pearton has subsequently advised that the amount claimed would increase every time Dimension Data’s attorneys ‘irritated’ him,” it said.

“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’.

“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 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, 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 Pearton’s undertaking and interdict him from persisting with his ongoing conduct.”  — © 2020 NewsCentral Media