9. Hackers Access Celebrity iCloud Accounts
8. PayPal Outage Disrupts $32 Billion in Transactions
On August 3, 2009, PayPal's online payment service suffered a global outage for an hour, and after that, the service suffered partial outages for another three and a half hours. At the time, a company spokesperson said that the cloud-based service was processing an average of $2,000 in payments every second. If you do that math, that comes out to $7.2 million in payments per hour. Over four and a half hours, the total number of transactions affected could have been as high as $32 million.
7. Nirvanix Files for Bankruptcy
Nirvanix was once one of the earliest pioneers of cloud storage. Originally called Streamload, the company was founded in 1998 as an Internet storage service. In 2007, the renamed company launched a product called the Storage Delivery Network, which included public, private and hybrid cloud storage capabilities. In 2011, it signed an important agreement with IBM, which saw IBM using Nirvanix technology for its own cloud storage service. Based on its promising technology, Nirvanix was able to raise $70 million in venture capital.
But in June 2013, IBM went another direction, announcing the purchase of SoftLayer and the formation of IBM Cloud Services Division. A few months later in September of that year, Nirvanix notified customers that they had just two weeks to retrieve their data before the Nirvanix cloud storage service would shut down permanently. The company filed for bankruptcy on October 1, 2013.
6. Power Outage Affects Food Stamps in 17 States
The Supplemental Nutrition Assistance Program (SNAP), which is known colloquially as "food stamps," uses Electronic Benefit Transfer (EBT) cards to allow recipients to purchase food using their government benefits. In 2013, Xerox was hosting the EBT systems for 17 states in its data centers.
On October 12, 2013, Xerox was conducting routine tests of its backup systems when a glitch caused the entire EBT system to go offline. For several hours on a busy Saturday, retailers had no way to determine the balances that shoppers had available on their EBT cards. As a result, some stores simply stopped accepting EBT cards, leading to some very unhappy customers. In other cases, the stores allowed benefits recipients to use their EBT cards anyway, even though the store had no way to know how much money the customers had left to spend. In some locations, shoppers took advantage of the situation, loading their carts with thousands of dollars' worth of food. Police were called in several states to quell "mini-riots," and the government later charged some of those shoppers with fraud.
5. Intuit Cloud Outage Blocks Access to Financial Software for 36 Hours
4. Salesforce Database Failure Wipes Out 5 Hours of Customer Data
3. Hurricane Sandy Leads to Massive Service Outages
2. Buggy Algorithm Destroys Knight Capital's Value
1. U.S. Government Fumbles HealthCare.gov Launch
On October 1, 2013, the U.S. federal government rolled out HealthCare.gov, a new website intended to allow people to sign up to buy health insurance under the Patient Protection and Affordable Care Act, often called Obamacare. Almost immediately, users began experiencing difficulties, and some reports indicated that less than 1 percent of the people who wanted to sign up online were able to do so. The project also ran far over-budget, racking up more than $1.7 billion in costs, up from an original budget of just $93.7 million.
Many observers say that the government could have avoided these problems if it had used a well-known cloud computing vendor instead of trying to build its infrastructure on top of legacy equipment. They also faulted the developers for inadequate testing and a lack of oversight and accountability.