Note: The Skinny blog is written by Rick Smith, editor and co-founder of Local Tech Wire and business editor of

RESEARCH TRIANGLE PARK, N.C. – Thinking about outsourcing your mission critical applications and information technology infrastructure? Then read closely the following e-mail from Rob Fyfe, chief executive officer of Air New Zealand:

“In my 30-year working career, I am struggling to recall a time where I have seen a supplier so slow to react to a catastrophic system failure such as this and so unwilling to accept responsibility and apologize to its client and its client’s customers.

“We were left high and dry, and this is simply unacceptable. My expectations of IBM were far higher than the amateur results that were delivered yesterday, and I have been left with no option but to ask the IT team to review the full range of options available to us to ensure we have an IT supplier whom we have confidence in and one who understands and is fully committed to our business and the needs of our customers.”


The Kiwis were throwing hand grenades at IBM on Sunday after its outsourced-to-Big Blue systems crashed. More than 10,000 passengers were affected by the collapse of the airline’s check-in, reservations and call center systems.

How fast did IBM get the airline back in the air? By 1:30 p.m. – four hours later, according to New Zealand media reports.

IBM later issued a statement expressing regret:

"IBM’s primary focus was to rapidly restore services to our clients, and in particular to Air New Zealand … IBM immediately engaged a team of 32 local IT professionals supported by global colleagues and management to restore impacted client systems. Services to most clients were restored within an hour of the outage."

Apparently the problem was traded in part to a backup diesel that didn’t fire up when needed.

The airline has worked with IBM since 1997, outsourcing its mainframe operations to Big Blue that year and then in 2001 outsourcing its mid-range systems.

Wonder if the folks down under believe today that outsourcing to save money and reduce headcount was such a wise investment after all.

Perhaps. But you can bet that the bottom line for IBM is reviewing its own internal contingency plans and backups – like that generator.

Interesting, isn’t it, that this outage comes just a few days after news broke that IBM’s mainframe business is under investigation for non-competitive tactics?

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