Online photo sites — no redundancy, no backup — and no business….

Is this any way to run a business? A major online photo site — PhotoChannel — goes down, taking down many of the its photo processor clients with it, including WalMart?

Walmart? The company that runs the largest and most sophisticated supply chain in the world — and they can’t keep a darned photo site up?

Where are their backup systems? Where’s the redundancy? Where is the plan to minimize business interruption?

I would imagine that PhotoChannel has absolutely destroyed its credibility with its customer base in this fiasco. And it goes back to a point I’ve been making for some time as found in my Profit article of some months back — I’m still of the belief that issues of security; overall infrastructure reliability; and redundancy are issues that need to be dealt with at the level of the Board.

I’d hazard a guess that the Board of Photochannel was negligent in their duties, and if I were a shareholder, I’d be screaming blue murder. IF I were the CEO of WalMart or Loblaws, I’d be demanding heads, asking how we could build a line of business on such a shoddy technical infrastructure.

Read below for the full story as reported in the Toronto Star.

Glitch crashes online digital photo stores – We had a piece of hardware fail’
Toronto Star, December 16/03

Digital camera enthusiasts who tried to order photo developing online last week were told for several days to “come back later” after a hardware glitch crashed the network that processes most of Canada’s digital photos.

The online digital photo stores for Black’s, Wal-Mart Canada, London Drugs, Japan Camera and Loblaws (Photolab.ca) were all out of service as of late Wednesday and only began to go back online yesterday afternoon.

“We had a piece of hardware fail,” said Kyle Hall, executive vice-president of business development for Vancouver-based PhotoChannel Networks Inc., the company that provides the online print-ordering system for Canada’s big-name photo finishers.

Hall said the company’s storage-area network, which is managed by StorageTek Corp. of Louisville, Colo., began having trouble last week receiving and directing order data.

Attempts to make a quick fix on Wednesday night did not work, forcing the company to do major upgrades on the network.

PhotoChannel’s clients handle 70 per cent of all photos processed in Canada.

All of their sites were taken offline during the upgrade.

With Christmas just around the corner, the five-day outage couldn’t have happened at a worse time.

Digital cameras were one of the hottest-selling gadgets this year, and an increasing number of consumers are choosing to go online this season to purchase photo-emblazoned calendars, mugs, mouse pads and t-shirts as holiday gifts.

“I’m ticked,” said Jim Carroll, an author and technology expert who has been trying to order a custom apron for his mother-in-law, a calendar and other photo-gifts for friends and family since late November.

Carroll said he placed his order through Wal-Mart, and found out last week the order was lost. He tried to place the order again and discovered the Wal-Mart site was down. After checking the sites of some of Wal-Mart’s competitors, he realized everybody was down.

“This just blows me away — and it’s so close to Christmas,” said Carroll, questioning why so much of the online photo infrastructure in Canada has been centralized with one company. “Where’s the redundancy? I wonder how many people out there are just as ticked.”

He now worries his gifts won’t arrive before Dec. 25.

Hall said the timing was unfortunate, but added that the most important part of the season is after Christmas when people are testing out the new digital cameras they got as gifts.

“From what we’ve seen from the past year and what retailers expect, order loads right now are light (compared with) what we’ll see after the holidays.”

Calls yesterday to Wal-Mart and Black’s were not returned. Geoffrey Wilson, a spokesperson for Loblaws, called the situation unfortunate but emphasized that no Photolab.ca customer data had been lost.

“We’ve been assured this won’t happen again,” said Wilson, adding that customers who were inconvenienced by the outage will be getting a 25 per cent discount on snapshot-size photo development through the site.

InfoTrends Research Group, of Norwell, Mass., estimates the worldwide sales next year of consumer digital cameras will hit 53 million, exceeding for the first time the sales of film-based cameras.

Sales are expected to reach 82 million units by 2008.
Additional articles by Tyler Hamilton