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Loss Making HP Faces New Crisis After ATO Debacle

The big Australian legal firms are presumably licking their lips, or at least sharpening pencils, at the prospect of taking on the loss making US Computer Company Hewlett Packard.

The Company who is use to legal action after being fined over $3M dollars for dodgy warranty claims relating to their PC Warranty claims now faces the potential of huge demands for compensation from the Australian Tax Office, following the three-day outage at ATO’s Canberra HQ.

Problems with the ATO datacentre and data storage system, recently supplied by HPE to replace an earlier and outdated EMC system, have been blamed in some quarters for the prolonged outage. The Tax Office in 2010 selected HPE over IBM as preferred tenderer for its centralised computing bundle.

To put things in perspective: IBM has reportedly agreed to pay more than $30 million in compensation for its role in the bungled census outage which saw the Australian Bureau of Statistics Web site closed down on Census Night earlier this year. The ATO outage appears likely to be a very much costlier affair.

The outage began on Sunday afternoon, leading to two sleepless nights for ATO and HPE expert teams, and while the major Web site was finally restored late on Tuesday, other services, including the ATO Business Portal and Tax Agent portal services, remained unavailable yesterday.

The issue is said to have compromised a petabyte (1000 terabytes) of information, including data, applications and systems. Back-up files reportedly failed to kick in as expected, which could lead to future problems with clients.

The ATO has said the issue was triggered by the “catastrophic” collapse of the hardware storage system provided by HPE. The ATO acquired two new HPE 3PAR storage networks late last year.

“Our primary back-up systems, that should have kicked in immediately, were also affected,” the ATO’s acting CIO Steve Hamilton has said.

“We understand this is the first time this problem has been encountered anywhere in the world and we are working with HPE to determine the underlying cause.”

Many tax agents are livid about the prolonged outage, which some say has cost them thousands of dollars. They say filing business activity statements and using lodgment services to fill in paperwork before the end of the year has proved impossible.

It’s likely that many of these agencies will be seeking recompense from the Tax Office – which in turn will be looking for much larger sums, presumably from HPE, though that company has yet to have its say.

The ATO said that, while most of its Web site and case management systems are back online, it will be at least a few more days before all services, including the vital tax agent portal, resume.

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