Big Businesses Faring Better In Blackout

The largest power outage to ever hit North America provided IT executives with a harsh reminder that no company is an island--and that business continuity and security remain top IT priorities.

Large businesses appeared to be getting through the blackout with relatively few disruptions, with many relying on backup generators installed in the wake of Sept. 11, 2001. At Pershing LLC in Jersey City, N.J., for example, a backup generator kicked in when the power failed Thursday, resulting in no disruption to the back-office securities trading, and clearing services the company provides to banks and other financial-services companies, a spokeswoman said Friday.

The New York and Nasdaq stock exchanges opened for trading on time Friday, while the American Stock Exchange delayed its opening because of a problem at a nearby Con Edison power substation.

Businesses operate about 9,500 data-storage systems from EMC Corp. in the blackout area, but an EMC spokesman said there were no indications of problems with those systems that have their own power sources and go through a controlled shutdown in the event of a power failure to preserve data. The systems also automatically contact EMC service centers when they restart; by midday Friday, the spokesman said, many had done so, all without reported problems.

Internet backbones from the 25 largest U.S. metropolitan areas were unaffected by the outage, according to Keynote Systems Inc., which provides Web-management services. In fact, some Manhattan financial institutions used their Web sites to communicate with customers and employees. Merrill Lynch posted a bulletin Thursday night saying it wanted to "assure our clients inside and outside the United States that no trading information was lost in the blackout and all assets are safe and secure," and said it expected to be open Friday morning.

But there are reports that disaster-recovery plans at some midsize and smaller companies failed, some simply because diesel generators lacked fuel. And redundant data centers built 150 miles outside New York and other metropolitan centers were hit as hard as primary data centers in the widespread power outage.

For some companies, particularly those in New York City, providing temporary call-center staffs in operational workspaces to fill in for employees who couldn't reach their offices Friday appeared to be a bigger issue than keeping data centers up and running, Gartner analyst Roberta Witty says.

The blackout may prompt IT managers to redouble their business-continuity efforts. While many companies conducted studies and made disaster-recovery plans after Sept. 11, 2001, some of those plans fell to budget cuts in the two years since. "That's where the rubber didn't meet the road," Witty says. Many companies also developed contingency plans only for internal IT failures, she says, a problem for businesses outside of the blackout zone that depend on companies hobbled by the blackout to conduct business.

Last week's Blaster worm attack and the blackout also are likely to spur efforts to reduce IT complexity, Meta Group analyst Michael Buchheim says. "When you have complexity, you have points of failure," he says. "And those points of failure increase vulnerability in an exponential way."