Carbonite Lawsuit Reveals Data Loss

Here’s a tough question: how do you balance the value of a problematic lawsuit against a vendor against the potential damage to your company’s reputation? Executives from Carbonite Inc. may be pondering that calculus this morning amid disclosures that the fast-growing online backup company lost data belonging to 7,500 customers.

The data loss was disclosed in a lawsuit Carbonite filed against two companies that supplied it with hardware. The legal dispute was covered by The Boston Globe Saturday and picked up this morning by TechCrunch and The Register, where it will no doubt be read by many of Carbonite’s customers and prospects. 

The incident is the latest high-profile stumble for cloud storage providers, following previous events at FlexiScale and The LinkUp.

Carbonite is suing two companies that sold it more than $3 million worth of hardware that it says was responsible for the loss of data for thousands of customers. Carbonite is seeking unspecified damages from the defendants, one of whom has publicly denied the allegations in the suit.

Carbonite said the failures caused “serious damage to Carbonite’s business and to its reputation as a reliable source for backup data service.” That’s certainly true for the 7,500 customers whose data was lost.

But I’m not aware that the company’s problems had been public prior to the lawsuit. Now readers of several of the most popular IT industry web sites are also aware that Carbonite lost customer data. Headlines about the incident could creep into search results, preserving the company’s headline risk for future prospects who may have missed the initial stories.

One thing is certain: The financial recovery from the lawsuit, if any, could be months if not years away. The publicity surrounding the lawsuit is a here-and-now challenge.

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About the Author

Rich Miller is the founder and editor at large of Data Center Knowledge, and has been reporting on the data center sector since 2000. He has tracked the growing impact of high-density computing on the power and cooling of data centers, and the resulting push for improved energy efficiency in these facilities.


  1. That's why you see companies changing names to get a new identity.

  2. I would like to make sure that your readers understand two points with regard to Carbonite’s lawsuit against Promise Technologies: 1) This event happened over a year ago. We do not say this to minimize the matter. But we do want to point out that this has not happened in a long time and is not an ongoing problem. 2) The total number of Carbonite customers who were unable to retrieve their data was 54, not 7,500. Here is what happened: The Promise servers that we were purchasing in 2006 and 2007 use RAID technology to spread data redundantly across 15 disk drives so that if any one disk drive fails, you don't lose any data. The RAID software that makes all this work is embedded as "firmware" in the storage servers. In this case, we believe that the firmware on the servers had bugs that caused the servers to crash. Carbonite automatically restarted all 7,500 backups and more than 99% of these were completely restored without incident. Statistically, about 2 out of every 1,000 consumer hard drives will crash every week, so 54 of these customers had their PCs crash before their re-started backups were complete. Since they weren’t completely backed up when their PCs crashed, these customers were unable to restore all of their files from Carbonite. Most of the 54 got some or most of their data back. We took full responsibility for what happened and I did my best to call each of these customers personally to apologize. As a result of our problems with the Promise servers, we switched to a popular Dell server that uses RAID6 – an improved RAID that allows for the loss of 3 of the 15 drives simultaneously before you lose any data. This configuration is in theory 36 million times more reliable than a single disk drive — the chances of 3 out of 15 drives failing at the same time are almost nil. So far, Promise has refused to accept responsibility for their equipment’s failures, so now we are suing them to get our money back. The Dell RAID servers have been flawless and we're extremely happy with them. Dave Friend, CEO Carbonite, Inc.

  3. Readers tracking this story should be aware that Promise has addressed the incident in a message to customers.

  4. Greg Benson

    all has been lost

  5. Cheryl Moore

    Carbonite lost all of my data and now it will cost me $1700.00 to retrieve it from a crashed hard drive.

  6. Tim Petrosky

    Dave Friend, Isnt it true that all 7500 customers lost their data, but even though your company was able to restart the backups, you still lost any and all 'historical' backup data. Example; my service keeps deleted items up on the offsite backup service for ever. Its never deleted. So i if i want to restore something i removed but didnt realize to a much later date, i can. Didn't the 7500 customers all lose that historic data for ever? I think its terrible that you are belittling the loss of data down to 54. What you really did is completely ruin 54 companies data and completely lose the historic data for 7456 other companies and people.