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I.B.M. Ups its Bet on Business Recovery Services
News Source
The New York Times
August 20, 2008
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I.B.M. is spending $300 million to build 13 data centers around the world, dedicated to helping corporate customers keep their businesses up and running despite power outages, natural disasters or political turmoil.

There has been a big increase in demand for these services in the last 18 months, according to Philippe Jarre, general manager of I.B.M.’s business continuity and resiliency services unit. The demand, it seems, is reflected in a nicely growing business. Though he won’t disclose sales for the business recovery group, Mr. Jarre did say it is fastest-growing business in I.B.M.’s big services division. His group must be doing well, since I.B.M. Global Services grew 16 percent last quarter.

Business continuity services are intended to help companies make sure the information technology engines of a business can recover quickly, after some calamity. A few years ago, the best companies could recover after being down for several hours or a few days.

Now, given the increased dependence of businesses on their global technology networks, recovery times have to be measured in mere minutes, Mr. Jarre said.

Large companies may have their own mirror, or redundant, data centers for business recovery. That is especially true of banks and brokerage houses, whose losses and lost opportunities mount by the minute. I.B.M. may help those customers build and operate such dedicated centers. Other companies have shared space in back-up data centers run by I.B.M., Hewlett-Packard, SunGard and others.

I.B.M. said the new investment marks a fresh approach to business recovery services, using “cloud” computing in which workloads can be juggled across computers in data centers around the world and quickly accessed by users. “This investment is the start of a new model for business continuity,” Mr. Jarre said.

Though the notion of cloud computing is over-hyped, the business recovery field seems to be a sensible application, said Dan Olds, an analyst at the Gabriel Consulting Group in Beaverton, Ore., who was briefed in advance on the I.B.M. announcement.

Business recovery, Mr. Olds said, can be made more cost-efficient and shorten down times using the cloud technology. “From a competitive standpoint, this is absolutely where the market is headed,” he said.

The obstacle for many companies, Mr. Olds said, is “going to be the trust issue - are you going to let I.B.M. or any other company hold your data?”

On the trust issue, I.B.M. has as strong a hand as anyone, Mr. Olds said, given its long history as a technology supplier and partner to so many corporate customers. “But trust could be an inhibitor,” he noted.

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