Data center outage pushes company into bankruptcy

Peak Hosting, a data center in Orlando has filed for bankruptcy following the loss of a customer that was responsible for 80 percent of its revenue. Machine Zone- a popular mobile gaming service provider suffered business loss due to a data center outage of Peak Hosting and so the company decided to move into a different facility in Las Vegas.

As a result of a big customer loss, Peak is seeking bankruptcy while it undergoes restructuring as well as financing to pay for its law suit with Machine Zone.

According to latest reports, Peak Hosting Company has five data centers in US and one in Europe.  Machine Zone has a $14 million per month contract with Peak Hosting through next October, but it stopped paying for services starting from Feb this year. For this reason, Peak Hosting is forced to file for bankruptcy and is suing the customer for $100 million for agreement breach.

As per Peak Hosting POV, the company has invested $35 million on equipment to host Machine Zone’s applications and that the customer has been using some of Peak’s proprietary technology. The data center provider has attributed last fall’s outage to a bug in Cisco Systems Software which made its data continuity systems malfunction.

More details are awaited!

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