The rapid collapse of Wirecard into insolvency should make us all pause for thought.
Would you have considered the potential for the collapse of a DAX30 firm that was valued at more than EUR24Bn two years ago and considered to be the tech darling by the German Government?
Probably not. You are not alone. What is your Wirecard moment?
In retrospect, there were many signals one could have read to forewarn the impending demise of Wirecard, such as: questions about the firm’s accounting that began in 2015; FT articles informed by short-sellers and whistle-blowers within the last 18 months, and the unfortunate rebuttal from BaFIN, the regulator, in the form of a temporary short-selling ban on Wirecard.
Of course, we are not typically short-sellers profiting from the demise of a target firm, but we ARE the people having to deal with the aftermath of the failure. The point is not that Wirecard failed spectacularly under the watchful eye of regulator and government, but simply, that companies fail.
Clearly, in the specific case of payment providers, you can, and should, build in resilience or redundancy from other provider services. But this will, of course, require an investment in technology and time.
Sadly, in many cases, a ready alternative to the cloud-based microservice provider, whose service you are consuming, isn’t always available.
So what should you do?
A ready and evolving option is that of cloud escrow. This has come some way from the old code escrow services that supported on-premise code bases. These days you can have an entire replica environment ready to go at a moment’s notice.
Of course, some of the vagaries of code escrow still exist. Sure, you will have a replica environment at your disposal, but if you want to test a ‘release event’ i.e. to know that the replica environment and your data are there when you need, it will cost a considerable amount of money. Moreover, this verification exercise is only a snapshot in time, to ensure business continuity, you need to repeat this exercise adding more to the cost of your resilience.
There are further draw-backs yet to be resolved in migrating to the cloud escrow model. The first being the lack of technical and operational expertise available following a release event. You are a customer who employed a service to support your business, you probably do not have the spare resource to start supporting this service. Moreover, what happens if the other customers of the vendor start trying to hire the remaining experts from the vendor? It will quickly descend into chaos with no winners. The second issue is that many SaaS solutions employ multi-tenant architectures in which single instances of the software support multiple clients (tenants). Releasing a multi-tenant environment would expose each client’s private data to the other clients.
Far better to partner with a provider who:
- understands your vendor and their offering
- has run failure scenarios
- manages your replica environment and is tooled and accountable to step in with a skilled and experienced bench to operate the service on behalf of you.
- that must ensure they can step in
- that will be stepping in on behalf of ALL the assured customers of the vendor
- who is aligned to the interest of all of the parties to the failure.
Adoptech is that partner. We understand the value that cloud-based providers create but also the risk inherent in deploying them. We are accountable for ensuring service availability so you can continue to operate as normal despite a failure. Our team knows your vendor and is highly skilled in understanding the step-in requirements, the technology, code, operations and data.
If you cannot predict failure. Plan for it
#adoptech. We got your back.