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June 6, 1988

DISASTER RECOVERY INSURANCE PAYS OFF FOR ILLINOIS STATIONER

By CBR Staff Writer

The Illinois Bell switching station fire, which has left an estimated 35,000 Chicago homes and businesses paralysed in a telephoneless timewarp (CI No 927), has served to reopen the disaster insurance debate. To date, few companies have chosen to invest in disaster recovery insurance, and those that have, tend to feel that they have paid too much for the privilege. Comdisco Disaster Recovery, Rosemount, Illinois, and the Wayne, Pennsylvania-based SunGard Recovery Services, the two largest disaster recovery companies in the US, have around 1,500 clients on their books, and charge between $1,500 to $25,000 a month for basic disaster insurance: the right to use back-up computer centres and networks in the event of a catastrophe, for example, is secured only by an additional fee. The fire has demonstrated, however, both the degree to which thousands of companies are now electronically dependent, and the speed and success with which back-up plans can be implemented. United Stationers, a $730m-a year office products wholesale company which had most of the lines linking offices and customers to its central computer in Illinois wiped out by the fire, was forced to call in Comdisco on the morning of May 9, reports the Wall Street Journal. A team equipped with back-up data tapes was immediately dispatched to a Comdisco mainframe facility in Carlstadt, New Jersey while at United’s Des Plaines, Illinois headquarters, telephone and computer lines were pulled out of the staff canteen ceiling to create a computerised war room. By the next morning, United had managed to recreate its computer network, and continued to function with the borrowed mainframe and the emergency canteen facility for the following two weeks. Although the emergency operation cost around $600,000 – including a $40,000 fee for Comdisco – the company estimates that it saved around $30m in sales, which would otherwise have been lost. Other unprepared companies – in particular banks and shops – have been badly hit, and disgruntled citizens continue to struggle on in a world where lawyers, bookies, stockbrokers, and the police have suddenly become unobtainable over the telephone. Full service is unlikely to be restored for another week or so while Illinois Bell, between restoring lines, is undoubtedly bracing itself for a plethora of bitter and costly lawsuits. How would your company be affected if your local telephone exchange were knocked out by some kind of disaster?

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