How Hurricane Sandy hit Online Economy

2 November 2012 by Anjali 1 comment

President Barack Obama declared hurricane Sandy as a “major disaster”. It has already claimed lives and shelter of many, cutting off communication and leaving millions of people shivering without power as thousands were evacuated from flooded neighborhoods. The storm hit the East coast region spanning the Eastern Seaboard from North Carolina to Connecticut. New York and New Jersey are the worst affected states of US by this storm that has been called ‘Superstorm’, ‘Megastorm’, ‘Frankenstorm’ and ‘killerstorm’ by the media.

This most devastating storm has hit the economy of US badly…much more than any other disasters in a decade. The New York Stock Exchange was shut for two straight days for the first time since 1888. Many big and small businesses across the affected area bore the brunt of the disaster. It was speculated that online business will be the support pillar in such difficult times. Internet-economy is far from reality.

U.S. has traveled toward online commerce by large but the economy still depends very much on physical highways, not just Internet highways. Century-old networks for physically moving people and goods are still the only way. As usual customers across globe kept purchasing online. Hardly did they know from where their product comes and if the logistics is affected by any adversity. It was a fight of keeping up the reputation for E-commerce companies like Inc, eBay Inc, and Gilt Groupe on Tuesday.

Merchants that use’s shipping service were warned about the impact of storm on handling orders and were asked to convey it to customers. For those merchants on Amazon’s online-selling space that handle their own shipping from affected area, the company advised them to temporarily deactivate online listings should they be unable to meet usual shipping standards. World’s largest online marketplace eBay emailed shoppers who purchased from merchants from impacted areas, asking them for patience. They also recommended that affected eBay Store-subscribers put their pages in “vacation mode” to control purchasing and show shoppers that their operation has been temporarily disrupted.

Customers residing in affected area are relying more on online retailers for grocery items now. However, reaching them through flooded routes under adverse weather condition has become a big challenge., a fast-growing design e-commerce start-up based in New York City, handled unusually strong volumes on Monday as people hunkered down at home. itself operates out of two warehouses in hard-hit New Jersey, one self-owned and another run by warehouse company Dotcom Distribution. With both lacking power as of mid-afternoon, no packages were making it out the door on Tuesday.’s offices a block from New York’s Hudson River were blacked out and closed until further notice.

It doesn’t end here. The delay in delivery is compelling customers to call customer-service. However, with the power and telecommunication down, the onshore customer service companies are not able to operate efficiently. Even the employees find it hard to reach offices.

Other Internet firms are hurt no less. Google’s New York headquarters faced backup power failed when commercial power was cut Monday evening. AT&T Inc. also faced issues in hard-hit areas. Verizon Communications Inc., the biggest phone company in the region, had some of its facilities in downtown Manhattan flooded, shutting down phone and Internet service. Renesys Corp., which monitors the pathways of the Internet, said the storm caused major hit New Jersey and New York are major transit points for international telecommunications traffic, and carriers were scrambling to route traffic around it. Cablevision Systems Corp., which serves parts of Long Island, New York City and New Jersey, experienced widespread outages due to the loss of power.

Many data centers had to convert from utility power to emergency backup and diesel generators as the public power supply disappeared. They found unexpected problems as the storm churned backup plans including flood. Most companies had emergency generators and diesel fuel in the basements, but basements were filled with water. They also have emergency delivery contracts for more fuel, but those contracts did not anticipate that the city’s bridges and tunnels would be closed down when the fuel was needed. For companies who rely on those servers, the stakes were high. Every hour their website was offline posed an increased risk that they will lose customers or readers.

Peer 1, a managed hosting service, changed its Hosting status from “Hurricane Sandy has not impacted operations,” to “facility has made the transition over to generator power,” to “basement is flooded,” to “we are going to implement a controlled shutdown” over the space of a few hours. Internap, a collocation and managed hosting service, was reported to be down.

A Datagram data center was knocked out and with it, popular websites Gawker, Huffington Post and BuzzFeed. No customers lost data but the disruption clearly frustrated companies that relied on Datagram’s services, and raised questions about why the company located its data center in a low-lying area. The Huffington Post and Buzzfeed temporarily moved their operations to Tumblr blogs. Buzzfeed was able to restore its site by moving its data to Amazon Web Services, with one developer working overnight despite a tree falling through his roof.

Datagram was not the only data center to experience flooding during the storm. Steadfast reported that servers at its data center in New York City were down on Monday due to an electrical failure. Data centers at lower Manhattan faced up to four days without power, while employees tried frantically to keep generators running. At one data center, employees reportedly hauled 55-gallon drums of diesel fuel up 17 flights of stairs to keep the generators running until electricity was restored.

Failures at data centers can have widespread impact across the Internet, depending on how many customers the data center serves. In an ideal world, people select data centers based on their tolerance of natural disasters but in reality, real estate and power costs drive data center locations, with disasters being something you prepare for. The critical thing is that you should never have all your data in one location or even in two locations susceptible to the same disaster. Still, most companies, particularly smaller startups, don’t back up their virtual infrastructure in multiple places.

We pray for a fast recovery from Hurricane Sandy and hope online world learns their part of lessons.


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