Sungard Business Continuity and Internet ServicesBy Matthew Rothenberg | Posted 2001-10-29 Email Print
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Comdisco's suitor will stop at nothing to get a client and while some like Sunguard's low cost and innovative services, others fear they won't have a convenient offsite spot when disaster strikes. Is there such a thing as too many customers?
You have to give SunGard credit: It plays to win. The company's business continuity division regularly dispatches sales staff to poach business from Comdisco and IBM, its two biggest competitors, and isn't shy about undercutting their prices.
SunGard may not have to undercut Comdisco's prices much longer; it has offered $825 million to acquire Comdisco, and barring regulatory obstacles, the two companies will soon be one. That would propell SunGard past IBM in revenues derived from business continuity services.
In any event, SunGard hasn't gotten where it is just by being the low-cost provider; its business continuity division is also an innovator, having pioneered the use of mobile data centers, trailers equipped with hardware and infrastructure that can provide workspace to devastated areas.
SunGard and the company it's courting are a study in contrasts. While Comdisco squandered much of its capital on shaky dot-com ventures, SunGard expanded beyond its disaster-recovery roots in more profitable ways. It embarked on an aggressive campaign of acquiring other companies for their technology; the fruits of SunGard's strategy can be seen in a software line that includes an equity derivatives risk management system, an Internet-based order entry trading application for futures and options, and other applications. SunGard boasts that its investment-support system is used by financial companies to handle 3 million transactions a day. A side benefit: These financial services customers represent potential business for SunGard's continuity services, a division that generated $410 million, or 25% of its revenues in 2000.
Some customers are concerned that SunGard's long customer list can cause problems in getting a prime spot at the company's most-used data centers during a disaster. For example, SunGard customer Ken Donovan, VP for corporate risk management with U.S. Bancorp, said many of his company's Wall Street employees had to relocate to SunGard's Philadelphia hot sites after the World Trade Center was destroyed. That's because SunGard's New Jersey facilities were claimed by other clients slotted in on a first-come, first-served basis after the Sept. 11 terrorist attacks.
If the union of SunGard and Comdisco takes effect, what changes should customers expect? Probably not much beyond the usual trimming of administrative staff. "There'll be nothing dramaticno flash cutovers or any of that stuffor you'll see customers running like scared rabbits," says Frank Dzubeck, president of Communications Network Architects.
1285 Drummers lane, wayne, PA 19087
(610) 341-8840 www.recovery.sungard.com
Business Continuity and Internet Services Employees: 1,000
SunGard, as a Whole, Has: 7,800 employees
CEO, SunGard Business Continuity and Internet Services
In April 1999, Simmons was named CEO of the business continuity unit and president of recovery services. Previously, he worked for the former Sun Data, which had been acquired by SunGard. He is a graduate of Furman University.
Chief financial officer
President, SunGard Planning Solutions
SVP of marketing and partnerships
VP, marketing at SunGard Recovery Services
Executive VP of operations, SunGard Recovery Services
Recovery Services includes infrastructure, electronic vaulting services, hot- and cold-sites, recovery network services, workgroup recovery; eSourcing includes Web co-location and hosting; Planning Solutions includes consulting and software.
Ingalls Employee Credit Union
Information systems manager
Project: Full disaster recovery coverage, including mobile recovery center support, for Pascagoula, Miss., financial institution. Crabtree has worked with both IBM and SunGard. SunGard subscription came in handy when credit union lost power during Hurricane Georges in 1998.
P.A.M. Transportation Services
Director of information services
Project: Business continuity planning for Tontitown, Ark.-based trucking company's two key data centers. Used SunGard's mobile recovery centers during a tornado in 2000.
Philadelphia Stock Exchange
First vice president, information services
Project: Disaster recovery at SunGard's Philadelphia data center, including thrice-yearly testing.