Sungard Business Continuity and Internet Services

 
 
By Matthew Rothenberg  |  Posted 2001-10-29
 
 
 

The Aggressor

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.

PDF DownloadSunGard 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 dramatic—no flash cutovers or any of that stuff—or 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

Ticker: SDS
Exchange: NYSE
Business Continuity and Internet Services Employees: 1,000
SunGard, as a Whole, Has: 7,800 employees

Jim Simmons
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.

Rick Toler
President, eSourcing

Ted Gaasche
Chief financial officer

Ken Smith
President, SunGard Planning Solutions

Bob Powell
SVP of marketing and partnerships

Dave Palermo
VP, marketing at SunGard Recovery Services

Larry Henderson
Executive VP of operations, SunGard Recovery Services

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.

Reference Checks

Ingalls Employee Credit Union
Chris Crabtree
Information systems manager
(800) 344-3281
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
Kevin McDonald
Director of information services
(501) 361-9111
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
Frank Reidy
First vice president, information services
(215) 496-5000
Project: Disaster recovery at SunGard's Philadelphia data center, including thrice-yearly testing.