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On Tuesday, Internet infrastructure company Fastly’s stock price rose 11% after a power outage.
Fastly is a content delivery technology provider that aims to accelerate online streaming and loading speed. As of the close of New York on Tuesday, its market value has increased by more than $600 million, and the little-known company is valued at $6.5 billion.
San Francisco-based Fastly apologizes for causing “undiscovered software bugs” power failure Affected 85% of its network. Fastly said that the error was triggered when a lone Fastly customer made a seemingly routine change to the way his system was set up.
Nick Rockwell, Fastly’s senior vice president of engineering and infrastructure, said: “Even if certain conditions caused this power outage, we should have expected it.”
Although its stock price initially fell following news of general outages of media companies, streaming media services and e-commerce platforms, the strong recovery suggests that investors may be impressed by the speed with which Fastly solves the problem.
In a blog post published late Tuesday, Fastly stated that within 49 minutes of discovering the problem, 95% of its network was “up and running.”
“We detected the outage within a minute, then determined and isolated the cause, and disabled the configuration,” Rockwell said. “This outage is extensive and serious, and we are really sorry for the impact on our customers and everyone who depends on them.”
The strong reaction from investors may also reflect the number of well-known companies whose power outages appear to be Fastly customers, including Amazon’s Twitch, Spotify, Stripe, and Shopify, as well as media companies including the BBC, New York Times, CNN, and the Financial Times.
The company uses content delivery networks to store data in dozens of server farms around the world, thereby reducing the company’s bandwidth requirements and speeding up consumer streaming and download speeds.
Fastly was founded ten years ago, and since it went public in May 2019, the company’s value has more than doubled.
Its revenue last year increased by 45% to US$291 million, and it has more than 2,000 corporate customers, but its net loss expanded by 86% in 2020 to US$95.9 million.
If Fastly is forced to provide expensive compensation to most customers, investors’ positive reaction to Tuesday’s events may be weakened. Subscribers of its “gold medal” support plan can guarantee 100% uptime.
“Any service level failure could harm our business,” Fastly said in a recent regulatory document, outlining the potential risks of its business, which also pointed to the previous “platform outage” in January 2021.
“If we are unable to fulfill the required service level commitments, including failure to meet the uptime and delivery requirements under the customer agreement, we may have contractual obligations in the past and in the future to provide service credit to affected customers, which may have a significant impact Our income,” Fastly said in a document last month.
After similar issues affecting Amazon Web Services and Cloudflare caused a large number of websites to go down last year, Tuesday’s outage once again highlighted that many of the world’s most popular online services rely on a relatively small number of cloud computing platforms.
“Internet infrastructure is an extremely complex dependent network, and reliability does not happen by accident,” said Andy Champagne, vice president of Akamai, one of Fastly’s competitors. “It requires a combination of technology and personnel to work with strict precision to ensure that it works like a well-lubricated machine.”
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