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WeWork needs a big, expensive IT upgrade

  • WeWork's technology infrastructure is due to expensive repairs, current and former IT employees, Business Insider reported.
  • At the beginning of WeWork, IT was led by a 16-year-old who dropped out of high school to join the company. WeWork later sued him, claiming he was fraudulently deceived and other claims in the event that the parties eventually agreed to be dismissed.
  • A repetition of what some current and former WeWork IT employees said was outdated and non-standard infrastructure could cost tens of millions of dollars – just as the company is looking for a drastic cost cut.
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Before its initial public offering collapsed, the WeWork office leasing company tried to position itself as a technology company.

But its buildings are loaded with technology that needs to be pulled out and replaced, three current and former WeWork IT employees told Business Insider.

If the company does not upgrade, tenants ̵

1; or "members" in the WeWork language – may inadvertently share their data with hackers who gain access to the network through outdated or non-standard technology, sources said.

Two sources have estimated that this is a project that can cost the company tens of millions of dollars.

"It's not a million, $ 2-3 million project. That's tens of millions," one employee told Business Insider.

A spokesman for WeWork, who declined to comment on the specifics, told us: "At WeWork, we continue to make significant investments in IT and technology to improve our systems and member experience. This includes investing in new services and specialized high-speed Internet connections for our growing suite of large enterprise customers. "

Some of the upgrades are simply a product of WeWork's success. Older buildings need to be redirected to maintain faster, more secure tenant load networks, all of which spill over into the network.

] In other cases, the job is the result of shortcuts and benefits and the inability of IT people to get the funding they need, these employees.

Early mistrust of IT

Adam Neumann, who was recently fired as CEO, is believed to be distrustful of The IT department, after Joe Fasone, wound up serving IT , left the company in 2014. [19659006] FASHION, who laid the foundations for WeWork technology, could not bring much experience to the company. He skipped his senior year in high school to join WeWork as its IT director in 2010. at the age of 16, Forbes said in his last profile of the year.

He stayed on until February 2014. According to his LinkedIn profile, WeWork later filed a lawsuit against Fasone, business partner Matthew McNish, and three companies, seeking 3.3 millions of dollars over allegations of fraudulent misrepresentation and civil fraud onspiratsiya. The parties agreed to dismiss the case in 2015.

A representative of Fasone and its businesses declined comment. Macnish did not respond to a request for comment.

Although Fasone left the company in 2014, bad taste may have formed. The IT staff we spoke with believed that one of the reasons they were struggling to get budgets for their projects stemmed from this incident.

This case against WeWork was not the end of Fasone's legal problems, including with an office company.

Fasone Stage Networks was launched in 2015 by companies for which Stage works in three separate cases. Together, the companies alleged to have failed to pay Stage a total of $ 525,000. In each claim, the parties agreed to stay the case and in two out of three countries indicated that they had reached an agreement.

Fasone, Macnish, Stage Networks and Fasone's current company, Pilot Fiber, were also sued in April 2015 by an optical fiber retailer called Optical Communications Group, which claims that Stage failed to pay nearly $ 200,000, according to the complaint. Stage is said to have started working with Optical in January 2013 – while Fasone was still at WeWork, according to Fasone's LinkedIn profile timeline – and Stage stopped paying Optical in February 2014 [19659006] Stage leases equipment from Optical to provide the Internet with WeWork's Location in New York, according to an Optical complaint.

"Because providing fast and reliable internet service is key to their business, WeWork is worried that failure to pay Stage [Optical] for the schemes will result in disruption of WeWork's workspace internet services," Optical's attorneys said

Optical claims that since Stage does not pay its Optical bill, WeWork agrees to pay Optical for the Internet.

Optics founder Brad Ikes told Business Insider that the company was settling the suit with Fasone. The case records were sealed.

Fasone and WeWork declined to comment legal issues, and Macnish and the men's lawyer at the time did not respond to requests for comment.

Now the technology leadership of WeWork can be no different than the 16-year-old CIO.

In June, Rajaraman spoke with Business Insider about how technology fits into WeWork's position.

"A big part of technology is just making sure we understand soup to nuts operations, instrumenting this and improving it over time," he said.

"Routers that are schematic at best"

Even with the rental profile two years ago, WeWork still has major gaps in infrastructure, IT staff say.

Under Neumann, every regional director known as CweOs handles the networking and technology that each building The company opens new places as quickly as possible and these regional managers were concerned about the costs associated with opening each building, and sometimes deals could be made with timelines that failed to account for the lack of basic building infrastructure, such as fiber optics.

Some CweOs seemed to cut costs

"You don't put in good routers. You're putting in second-class routers that are schematic at best," one person said, adding that because Chinese clones "cost a dime nd "compared with market leader Cisco.

A former employee also believes that it focuses on costs at the expense of productivity.

"Most installations have equipment that is the end of life. This is how they come out cheap," says the source. He said that when he was there, WeWork often purchased equipment indirectly rather than from manufacturers, so they could not receive technical support if needed.

Sometimes, managers save money by hiring less experienced people to install the network, these people said.

And the situation is compounded even as WeWork expands, adding more space to the buildings it previously occupied. One floor can use one contractor and one set of facilities and the other floor is a budget job.

"An IT closet looked like a 10-year-old built it – a rat's nest – and literally next to each other, one was professional," said one IT employee.

Some of WeWork's customers complained about poor networking. CNet's Alfred Ng reported in August, CNet reported that one tenant says he has been complaining about insecure WiFi since 2015, and that simple scans on his network allow him to see sensitive files on 658 devices owned by other tenants of WeWork in its building, including financial records.

Other Rent WeWork's mothers take matters into their own hands and implement their own network security, a former employee told us.

But if every tenant does this with the most popular method of securing data on an insecure network known as VPN, they could overwhelm the building network and slow everyone down, two sources said.

Big changes are happening in WeWork, including IT. After Neumann was removed in September, co-CEOs Arty Minson and Sebastian Gunningham took a serious look at all parts of the business. As part of the changes, WeWork is working to centralize its IT operations, a current employee said.

But centralization may not be enough. As companies tighten cybersecurity practices, complete and costly repairs may be needed – just as a company wants to reduce costs.

Do you have any advice? Contact Megan Morris on (646) 768-1627 or Julie Bort on (970) 430-6112 using a non-working Bort phone or email at jbort @ businessinsider.com or mmorris @ businessinsider .com. Visit the DMs on Twitter at @MeghanEMorris or @ Julie188 . (PR tests via email only, please.) You can also connect to Business Insider securely through SecureDrop.

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