Free Service Doesn't Help Verio Web Outage Victims

FRAMINGHAM (07/07/2000) - In response to severe Web service outages, Verio Inc. plans to offer affected customers one month of free service - worth about $150.

But several users said that gesture doesn't begin to cover their business losses.

Officials at Verio, a Web hosting, e-mail and connectivity services firm based in Englewood, Colo., last week blamed outages and service delays at more than 1,200 Web sites on problems the company experienced while updating router configuration tables at its Vienna, Virginia, data center.

Some Verio customers, such as Christopher Mott, president of Mott's Miniatures & Doll House Shop Inc. in Buena Park, California, couldn't take online orders for seven days. Mott said his site still wasn't fully functional this week, costing him more than $14,000.

"With 71% of my business coming from Internet sales, my losses will far exceed a voucher for one month's free hosting," he said. "I can't even begin to calculate the loss in terms of goodwill or customer confidence in our site and our company."

"The fact that they are giving us back $100 or $150 does not offset the thousands of dollars in productivity losses; throwing that bone is kind of a joke," said Michael Baraz, president of Automated Information Management Inc., a Lombard, Illinois-based Web development firm.

Verio officials declined to comment further on the service outages. "Nothing has changed since last week," said company spokeswoman Mona Peloquin. "It was a router problem. The service was restored."

"I have been told that it was always a router problem and that they were switching to a new data center. Yeah, right," said Charlie Nunemaker, director of information systems at the North Shore-Barrington Association of Realtors in Northbrook, Illinois. Because of "nightmare" Web service outages and poor response times in the past seven months, Nunemaker said, he stopped using Verio for Web hosting and is looking for a new provider.

"Blaming the problems on a router sounds like a technical brush-off, because I can't imagine that they only have one router," said analyst Michael Erbschloe at Computer Economics Inc., a market research firm in Carlsbad, California.

"Everyone has problems from time to time, but even if hardware fails, it can be swapped out in no time. This should not take five days - just 50 minutes, maybe."

"Lack of customer service has always been a black cloud over (Verio)," said financial analyst Brent Bracelin at Pacific Crest Securities in Portland, Oregon. He added that the company's level of service could be further impacted if a proposed $5.5 billion acquisition of Verio by NTT Communications Corp. goes through.

"Whenever you have a large merger, there's lots of turnover, and folks that normally manage services may be gone," Bracelin said. However, the acquisition is currently the subject of a U.S. government probe after the FBI raised concerns about the deal on national-security grounds.

David Sutphin, president of Dream Maker Software in Englewood, Colorado, switched from Verio to another service provider three months ago, after he couldn't update his online clip-art firm's Web site for 10 consecutive days.

"Verio said the problem was with equipment on the return loop to us, but instead of helping, they said, 'It's not our problem; it's a router somewhere else.' So, why am I paying them?" said Sutphin.

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