“When Richard A. Grasso, the chairman of the New York Stock Exchange, said last year that the Big Board was considering a backup trading floor at a “nuclear distance” from New York City, it was treated as an ill-phrased gaffe. But after last week’s power failure that blanketed an area stretching from the Northeast to the Midwest, companies are taking a harder look at whether their disaster recovery plans go far enough — literally,” writes John Schwart in today’s New York Times.

” ‘The geographic dispersion of this event really causes some rethinking for companies,’ said Jim Simmons, the chief executive of Sungard Availability Services, a company in Wayne, Pa. that runs disaster recovery centers for about 10,000 clients in North America and Europe.”

“Many companies that tried to manage their own disaster recovery plans, he said, found on Aug. 14 that the backup site they had created was still within the blackout area. He said customers told him: ‘Gee, I never thought it would be out on Long Island and out in New Jersey.’ “

“But even having backup centers hundreds of miles away might not have helped, he said, since the blackout zone extended into the Midwest and Canada. ‘The education coming out of this disaster is you can’t predict a disaster,’ he said. Companies like his ensure that the data is there and desks are there for clients who pay anything from a few hundred dollars a month to a million dollars a month. ‘For some companies,’ he said, ‘minutes of downtime can cost millions of dollars.’ “

“So many companies look to services from companies like Sungard and I.B.M. to handle that side of the business for them. They can create disaster-hardened backup offices — even if they happen to fall within the blackout zone — ready to go on short notice and linked directly to their computer networks in ways that ensure against any loss of important information and little, if any, interruption of business transactions.”

“Having operations distributed across the nation is an old and honored strategy for companies with big call centers, said Gary Morgenstern, a spokesman for AT&T. When a call center in New York goes down, he said, “that traffic is automatically routed to the West Coast,” and the flow of commerce continues.”

“But for many companies, setting up redundant operations in far-flung places can be expensive, said Don DeMarco, vice president for business continuity and recovery services at I.B.M., ‘and the probabilities are fairly low’ that a true test of such preparations will ever come. “I can only think of one or two clients in the past couple of months, he said, ‘who have told us they want substantial geographical separation’ between their operations centers.”

” ‘Every single company should decide what their tolerance for risk is,’ he said. The thriftier strategy makes sense until a big problem like the blackout occurs. ‘If they need it, it’s sure nice to know it’s there,’ he said.

http://www.nytimes.com/2003/08/19/technology/19BACK.html