From 2002 to 2010, InCompass IT staff and client’s suffered over 25 “outages” for InCompass IT’s cloud services. These “outages” were caused mostly by human-error. However, it meant that InCompass IT’s clients couldn’t access any of their work applications or data for hours or sometimes days. Under contract, XO Communications is supposed to reimburse its clients for such “outages”, however; Tim Lambrecht had negotiated with John Unger (Vice President) a real estate deal to cover the significant loss of business InCompass IT had incurred. Unfortunately, XO Communications backed out on the real estate deal and forced Tim Lambrecht to file the following two lawsuits:
InCompass IT vs XO Communications for excess of $400,000 in loss revenue due to outages.
End Result: InCompass IT was forced to withdraw. To XO Communications advantage, they had a clause in the Minnesota State contract stating that all legal issues will be fought in Virginia. Unfortunately, the expense of fighting a legal battle in another state, across the country, was not feasible. InCompass IT had to withdraw the suit and allow XO Communications to get away the 25 outages without penalty.