Glenn, thanks for sharing.
I'd like to share I plan on re-entering SunGard (SDS) as a long term investment between now and the end of this year.
>September 16, 2001
To the firms that provide businesses with disaster recovery services, the horrifying attacks that destroyed much of the World Trade Center last week represented a worst-case scenario come true.
"I'd say it's been an extremely active week, but it's never something anyone looks forward to," said Jim Simmons, president of SunGard Recovery Services.
Disaster recovery specialists offer the data, systems and offices that U.S. companies need to cope with business interruptions. Such disruptions can range from a power outage or chemical spill to fire, flood, earthquake -- and now even terrorist attack.
"We don't usually see something of this magnitude," said Mary Moster, a spokeswoman for Comdisco Continuity Services. "The loss of human life overshadows anything we can talk about."
The National Association of Insurance Commissioners said that early loss estimates put the damage at $10 billion, while other analysts have set the total as high as $30 billion.
Industry research firm Gartner Dataquest estimates that 85 percent of the world's 1,000 biggest companies have disaster recovery plans that include retaining an outside firm to back up services.
The percentage is even higher among the closely regulated brokerage firms and financial services giants concentrated in lower Manhattan, said Donna Scott, a Gartner analyst in Austin, Texas.
About 1,200 businesses were housed in the World Trade Center's twin towers, including Bank of America, Kemper Insurance, Lehman Brothers, Morgan Stanley Dean Witter, Credit Suisse First Boston and Sun Microsystems.
Companies with offices nearby, such as American Express and Merrill Lynch, also have been forced to relocate their operations elsewhere in Manhattan and New Jersey.
But for most American companies, Scott estimates that only about 25 percent have a business continuity plan.
Comdisco, SunGard and IBM Global Services are regarded as the industry's three leading providers of recovery services. Gartner estimates the three collectively hold about 80 percent of a $2 billion-a-year market.
Gartner also estimates that two out of five enterprises that experience a disaster go out of business within five years.
"You have to ask what would it mean to my company if something like this had happened to us?" said Joel Childs, president of FedEx Custom Critical and an adviser to the Disaster Recovery Journal, a trade magazine. "If the answer is 'We're dead,' or 'We'd have no place to go,' then you need to develop a good business recovery plan."
SunGard Recovery, a unit of Pennsylvania-based SunGard Data Systems, operates 26 centers throughout North America that can be made available to customers whose business has been disrupted.
Such centers are filled with computers, data storage equipment, backup generators, Internet access, as well as desks, phones, chairs -- "basically everything to keep a business in business," Simmons said.
These centers do not stand idle, Simmons added, "because many of our 5,500 clients several times a year run practice procedures, drills or tests of their business continuity plans."
Simmons said that SunGard's customers range in size from small businesses paying hundreds of dollars a month to Fortune 500 companies that pay a half million dollars a month.
In lower Manhattan, of course, the task of rebuilding extends far beyond the needs of individual companies. A breakdown of telephone, electric and other services has been a major obstacle for authorities.
For stock trading to resume tomorrow, telecommunications companies are rerouting data and laying new cable around the devastated area and powering the transmissions, in some cases, with diesel generators.
A spokesman for Verizon Communications described the area as "the most telecommunications-intensive square mile in the world." Verizon said one of its five switching centers near the disaster site was out of service. Some 200,000 lines and 3 million data circuits, or private lines that normally serve business customers, are housed in the building.
Even for companies with disaster recovery plans, Comdisco's Moster said, "It's going to be a very big challenge for our customers to recreate their paper files, not to mention all the things that were in the minds of people who were there at the time."
In the aftermath of the attack on the World Trade Center, Moster said Chicago-based Comdisco has been working with 37 customers, including the New York Board of Trade, a commodities exchange.
"We are actually re-creating the customers' business environment," Moster said. For the Board of Trade, Comdisco is re-creating a trading floor across New York's East River, in Queens. Comdisco operates 27 recovery centers in North America, including 23 in the United States.
Comdisco's intent is to provide everything a company's employees need to resume business, even to the extent that telephone calls to the previous exchange will ring at their desks and e-mails will arrive as before.
Although Comdisco filed for reorganization under Chapter 11 of the federal bankruptcy laws in July, Moster said the company's bankruptcy has had "absolutely no effect on our ability to provide business services to our customers."
She said that Comdisco has agreed to sell its services business, which includes its disaster recovery unit, to Hewlett-Packard. The $610 million deal is pending approval by the federal bankruptcy court.
SunGard has about 150 customers in lower Manhattan, Simmons added, and 70 have notified SunGard they are experiencing disruptions from the Sept. 11 disaster.
"Twenty-one of them have enacted their business continuity plans and are utilizing SunGard facilities to restore their operations," Simmons said. |
