Nick Shelomanov and Yury Karpowicz founded the online electronics retailer MegaBuy after feeling they could improve on the available offerings for computer hardware and software. Now their little experiment turns over $15 million a year.
But not long after the business was founded, disaster struck – a data hosting fault meant the site crashed for over a week, leading some customers to think the business had even shut down.
Shelomanov says the incident shows why businesses need to invest plenty of funds into their hosting services, or they will face disaster.
How’s the business going?
It’s going very well – Gerry Harvey helps a bit. He’s certainly done a lot to promote online retailing in the last little while. I don’t know if it’s specifically because of that, but especially in January and February business has really picked up a lot.
December was kind of slow, but it happens with online retail because it’s a delayed gratification thing. People border on making a purchase and then really go for it.
So what happened in the lead-up to your website crash?
We were looking for what we needed in terms of bandwidth and traffic size, and so on. We needed a fairly significant amount, so we couldn’t pick just any provider. From that perspective, we were dealing with a few different operators who could provide that sort of scope.
This is back in the day when limits were a little bit lower than what we have now. So we went, looked around and one of the places that met this criteria we thought was pretty good. So we went ahead with it.
You probably would have been considering price as well
When you’re a young company, pricing is definitely a consideration that you keep in mind.
When the website crashed, how did you react?
It was all of a sudden. And this really goes back to the hosting provider not being up to scratch – I know many people who left it as a result.
The whole power rail burnt out. So you have a server rack, and then what powers it is the power rail. That went down, and it took out the entire rack, or perhaps a little more, in the data centre. It did a considerable amount of damage.
What did the hosting company say?
After a day you think, “What’s going on?” and then after that they stop taking your calls. There is an immediate communication problem. We were basically in the dark.
What was the actual impact on the business?
Looking back, at the time we didn’t have all that much staff so it wasn’t so bad as there was plenty of other stuff to do – but it definitely stopped the sales. It stopped sales and that wasn’t good.
We’re thankful it didn’t happen now, because we have over 10 staff and having something like that happen to us would be a whole lot worse.
But we used that time to catch up on many things in the business – there was a lot of paperwork and we used the downtime to get through all that. We had work to get on with, and that was important. But it was definitely a lesson learned in picking service providers.
It obviously would have been stressful though.
Well, at the time we didn’t have a contingency plan. There was always these people saying, “It’s getting fixed, it’s getting fixed”. But if you don’t have an option where you can be back online a few hours later, or whatever, then it can be extremely hurtful.
It was definitely a stressful time. We had many people calling asking if we were still operating at all.
How long were you down for?
About a week, altogether.
How did you respond to all of this happening?
We moved to a service provider, a business-grade service provider, paying a good amount of money. We’ve got 24-hour phone support, and so on. Of course, you do have problems every now and again, but those are just glitches – they aren’t full on site outages.
The most I’ve had since then is maybe an hour down, and it really comes back to the degree of risk that you’re prepared to take.
What was the biggest lesson you learned from that period?
The lesson learned here is don’t be stingy on key infrastructure. If you’re a retail business, this applies as well – you wouldn’t skimp on POS equipment because when your front-of-sale touchscreens or cash registers stop working, everything grinds to a halt.
If you make your revenue through a website, then don’t skimp on your web hosting, or on any of the things that will make the wheels stop spinning if it breaks down. Have an alternative.
Do some research before you buy, and when you do have an outage, make sure it’s because you’ve either planned it, or you have a backup plan. It’s really not worth it to save money on hosting when it is the front-end of your business.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
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