Yesterday's massive power outage in the Northeast and Canada drove home what most corporate IT departments already know: disaster recovery preparation pays.

"The fact that we haven't heard too much about this topic, other than Fidelity shutting down after hours trading, suggests that everything went smoothly," reports Steve Kenniston, technology analyst at Enterprise Storage Group. "All of the financial institutions told everyone to come into work, so that shows things were fine as well...Since 9/11, there is a heightened sense of awareness around these factors, and despite what the public may or may not know or hear about IT, a number of folks that consider data protection a key asset to longevity of their business did take action."

But while large companies appear to have been prepared, small companies might not have fared as well.

"An often-overlooked side of these stories concerns small- and mid-size businesses," says John McKnight, senior analyst at Enterprise Storage Group. "My guess is that most of them do not have an adequate – if any – data protection strategy. For example, even if there was no impact to Wall Street yesterday, I'd be curious to know how many 5-10 employee advertising agencies, PR firms, architects, and fashion houses in New York City lost valuable data in the outage. There's definitely an economic impact there, albeit on a smaller scale."

Brian Fowler, global director for business continuity services at HP, agrees that small companies could be hit the hardest.

Smaller companies typically have UPS (uninterruptible power supply) systems that allow for a controlled shut down, but they don't typically have generators for longer-term outages. That means they're off-line until power is restored.

"The longer you're off-line, the more likely it is that customers will phone someone else," says Fowler. "It's 10 times more expensive to get a new customer than to keep an existing one."

The events of 9/11, other terrorist attacks since, SARS, and recent laws and regulations like Sarbanes-Oxley have driven home the need for business continuity solutions. As a result, "a lot more customers were prepared for this than would have been the case two or three years ago," states Fowler.

That means that more small- and medium-sized businesses (SMBs) are developing business continuity plans, according to Fowler, focusing on traditional "shared subscription" plans. Among larger companies, more and more are requesting "disaster-tolerant" solutions, such as HP's recently announced StorageWorks Multi-Site Disaster Tolerant Solution, for when "no downtime is acceptable and every transaction is important," says Fowler.

For companies developing disaster recovery plans, Fowler tells them not to focus on what might occur. "Focus on what the extent of the event and consequences might be and work from there."

HP had one customer who declared a disaster — but that's not as bad as it sounds. The company, which has a business services agreement with HP and mirrored data, switched over production to HP's 50,000 square-foot recovery center in Philadelphia and is back up and running. Several other customers have notified HP that they too may be running operations out of the center if the outage goes on much longer.

In HP's Toronto facilities, 14 outsourced customers and HP internal operations are handled out of robust, dual operation centers with fully redundant capabilities. When the outage hit, HP said it seamlessly transitioned to UPS units, then to backup diesel generators loaded with sufficient capacity for up to one full week. The uninterrupted trade customer operations in Toronto include banking operations (including one system that supports ATMs across Canada) and SAP environments supporting manufacturing and financial processes.

The Toronto facilities also support internal HP applications, such as www.hpshopping.com, HP's direct shopping Web site, which is up and running on diesel generators. HP manages disaster-tolerant configurations at the Toronto Operations Centers for a wide variety of multi-vendor equipment, including IBM mainframes, IBM AS/400s, IBM RS/6000s, Sun servers, HP UNIX servers, HP Non-Stop servers, and Windows servers.

If companies didn't get the message before, the events of this week will likely drive home just how important a thorough disaster recovery plan is.

"People need to consider that data protection is more than just backup software," says ESG's Kenniston. "DR stems all the way to understanding what power grids you are on, how to ensure that in the event of failure you know where to find things like license of software, how to quickly replace hardware, how to work with your vendors, etc. Data protection/disaster recovery is a process."

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