A dramatic example happened today of what happens when the cloud goes down. A nationwide outage brought down the Woolworths point of sale system. The registers went down, and as no sales could be made, customers were told to leave groceries in baskets in the aisle
Here is a first level approximation of what it is going to cost them, Woolworths Group Ltd (OTCPK:WOLWF) Gross Profit: $15,928.900 Mil
Assuming that they work about 360 days a year, we are looking at $44 million a day
It went down on the busiest time of the day so we can assume 2/3 of a day of trading losses that is $33 million
How many go elsewhere, I do not know, but Coles is full now, so as a punt I would say half or about 17 million dollars profit loss plus a whole lot of goodwill. I would hate to be the IT manager at Woolworths having to explain to the board just what went wrong.
It could and should have been avoided by having a local backup processing system, which is something we always recommend if people do go ahead and install a cloud.
Update: This was written when the outage occurred. I noticed that when I was coming back from work at 9 pm, the Woolworths I passed were all open and trading. What it does show is the problems with cloud and retail. What it also shows as our system would not have gone down that in this respect our system is better than the Woolworths POS system.
