Disaster Recovery RISING

The heightened threat of terrorist attacks in the wake of the assaults which took place on September 11 is causing consumer goods companies in the United States to take IT disaster recovery planning much more seriously than they previously had. This move is partly designed to keep retailers confident in their supply chain.

Indeed, consumer goods companies have always taken disaster recovery, also known as business continuity, seriously. And they have always had some type of plan in place in case business support services were forced down, whether by weather, fire, or terrorism.

Weyerhaueser, a manufacturer of lumber and paper products, actually spun off its disaster recovery division into a separate unit which offers its services to other companies, including competitors. Weyerhaueser made this move in 1985.

"The September 11 events have definitely heightened awareness of disaster recovery," says Gus Bader, director of Wyerhauser Disaster Recovery Services. "But I guess that's to be expected. It's something that always happens after earthquakes and other disasters."

Ironically, he said, failures that occur on "sunny afternoons" end up being the most burdensome and critical. "That's what our customers have a hard time understanding. Some 87% of the disasters which occur in the consumer goods industry are based on facility failures, not on natural failures. Sometimes systems fail for no easily discernable reason, like a simple disk crash, and that's statistically a much bigger problem in terms of reliability and recoverability than a natural disaster or terrorism."

The heightened awareness in disaster recovery comes at a time when the disaster recovery business itself is in flux. Chicago-based Comdisco, the grandfather of disaster recovery companies and formerly top-ranked, recently filed for Chapter 11 bankruptcy protection and is seeking to sell most of its assets to SunGard, based in Wayne, Pa., a vendor that was once its fiercest rival.

Meanwhile, IBM Global Services, based in Armonk, N.Y., continues to be the other major player in the disaster recovery business besides Comdisco and SunGard, racking up about $1 billion in revenues. A recent report from Gartner Group, the Stamford, Conn.-based consulting firm, breaks down IBM's disaster recovery business into four components, namely, multivendor IT recovery services, consulting, business risk management and continuity advisory services, and critical business process continuity services. In the event of a disruption or disaster, customers can relocate their processing to a selected recovery center, also known as a hot site, for restoring vital data and processes.

Besides the so-called "big three" (Comdisco, SunGard and IBM, which between them account for over 90% of the disaster recovery business), small regional players abound in the disaster recovery industry.