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DataCentred episode revives 2e2 lessons

The collapse into administration of DataCentred has reminded some in the channel of 2e2 and the need for customers to reduce exposure to one supplier

Those who caught in the collapse of 2e2 still shudder at the memory but the industry has thrown up another example of the dangers of users backing the wrong horse.

The recent collapse of Manchester-based DataCentred, which went into administration earlier this week, has sounded an alarm over cloud and data centre supplier strategies.

The firm, set up by Dr Mike Kelly, had been given backing as recently as a year ago to grow the business with a £500,000 loan from Barclays and £500,000 coming from existing investors, which included The Greater Manchester Combined Authority.

In its four years of trading DataCentred had built up a network of clients and there are hopes from the administrators FRP Advisory that the business and assets can be sold to a new onwer.

In the meantime there will be plenty of users wondering if they could be vulnerable if their cloud supplier got into trouble and the advice from some in the industry is to review that process.

“Almost all businesses are fundamentally dependent on IT to operate and deliver their products and services to customers. Moving IT to the cloud, hosting and data centre providers in most cases will improve the resiliency and reliability of IT. However, resilient IT isn’t just about power and bandwidth uptime figures, it also includes supplier management," said Peter Groucutt, managing director at Databarracks.

“Recent research undertaken as part of our annual Data Health Check (DHC) revealed that only 36% of organisations evaluated the continuity risks of their cloud provider. Given that cloud is still a maturing market place and that many firms carry a lot of debt, it’s important to keep an eye on suppliers," he added.

The advice from Databarracks is to make sure that customers are encouraged to have backup copies of data outside of production so they have control if the worst happens to their supplier.

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