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On 18 August 2023, a ransomware attack crippled Danish hosting provider CloudNordic and its sister company, AzeroCloud. The companies said attackers encrypted production systems and both primary and secondary backups. CloudNordic later said it could not recreate more data and that most customers had lost the data hosted with it—not, as the original headline might suggest, that every customer’s data was confirmed lost.
What happened to CloudNordic?
CloudNordic and AzeroCloud reported that the attack began on 18 August 2023. It disabled websites, email, customer systems and hosted customer websites. CloudNordic described the company as having been “paralyzed […] completely.”
The companies’ account, reported at the time, linked the incident to a data-centre migration. Previously separate networks were connected to an internal management network; some machines may already have been infected. The reported sequence suggests that this connection gave attackers a path to central administration and storage systems, including the backup environments. The precise initial infection mechanism was not established in the material available here.
CloudNordic’s incident statement, reproduced by SecurityWeek, said: “The attackers succeeded in encrypting all servers’ disks, as well as on the primary and secondary backup system, whereby all machines crashed and we lost access to all data.”
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Did CloudNordic lose all customer data?
CloudNordic said the majority of its customers lost their data with the company because it proved impossible to recreate more. That is the supported account; it does not establish that every customer lost every file. Contemporary Danish reporting described hundreds of affected businesses, but “hundreds” was a press description, not a final audited customer count.
CloudNordic rebuilt blank name, web and mail servers, but initially those systems did not contain customer data. Rebuilding the service infrastructure therefore did not itself restore customers’ websites, email or other hosted content.
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The Danish Centre for Cyber Security (CFCS) later cited the related AzeroCloud case in its 2024 national threat assessment. It said criminals encrypted “all data including backups,” leaving most customers without their data, and recorded that AzeroCloud announced bankruptcy in March 2024.
Why couldn’t CloudNordic restore from backups?
The company’s account describes encryption of production disks as well as primary and secondary backup systems. If recovery copies can be reached through the same compromised network or administration environment as production, an attacker who gains broad access may be able to damage both. In this incident, the identified copies were not available as clean restoration sources.
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Having two backup systems did not guarantee recovery because the number of copies alone does not show whether they are isolated from the same failure. The relevant question is whether a backup remains protected when production systems, shared credentials or central management tools are compromised.
Was it ransomware, and who was responsible?
CloudNordic said it would not meet the criminals’ ransom demand. Its statement, reproduced by TechTarget, said: “As we cannot and do not want to meet the financial demands of the criminal hackers for ransom…” The company’s IT staff and external experts assessed what could be rebuilt, and the incident was reported to police.
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Data Center Dynamics reported, citing Danish broadcaster Radio4, that the demand was six bitcoin. That figure is second-hand reporting, not an independently verified amount published by CloudNordic.
A specific ransomware group is not authoritatively identified by the provider and government sources cited here. Faust attribution appears in secondary threat reporting, but should be treated as unconfirmed rather than as an established fact.
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How hosting customers can reduce the same kind of risk
The practical lesson is to assess whether your recovery path would survive a compromise of your hosting provider’s production environment. These are safeguards customers can ask about or arrange independently; the incident does not establish that CloudNordic endorsed any particular product or provider.
- Keep a copy outside the host’s control plane. A backup should not depend solely on the same provider account, network, administrator credentials or management system as the live service.
- Use immutable or write-once retention where appropriate. Set retention so ordinary production credentials cannot alter or delete retained copies during the protected period. Confirm who can change retention settings and through which account.
- Separate identity and keys. Use distinct credentials and, where the design supports it, separate encryption-key control for recovery copies. Protect administrative accounts with multifactor authentication and limit who can manage backups.
- Consider geographic and provider separation. A copy in another location or with another provider can reduce dependence on one data centre or administrative environment. Separation should be operational as well as geographic: shared accounts or management credentials can undermine it.
- Test restoration, not just backup completion. Periodically restore representative files, databases, websites and mail into a separate environment. Record how long recovery takes and verify that the restored data is usable.
- Plan how to leave the host. Keep current exports of important data, document domain and DNS control, and check how quickly you can retrieve data and move services. A backup that cannot be exported in a usable form may not support a timely exit.
- Compare recovery designs against your needs and cost. Ask about isolation, immutable retention, location, identity and key control, restore-test evidence, export support and the total cost for your data volume. The incident sources establish why separation matters; they do not test or rank commercial backup products.
What this incident shows about provider risk
A customer can lose data without operating the compromised infrastructure. Hosting centralizes storage and administration for many customers, so an incident that reaches shared systems can affect businesses that did not make the migration or network decisions involved. Resilience therefore depends not only on the host’s copies but also on whether customers have an independently controlled way to recover their own critical data.
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