EVERYTHING'S DIFFERENT, NOTHING'S CHANGED

Beneath the larger tragedy, the terrorist attack on the World Trade Center a year ago was also the biggest communications catastrophe in American history. The bombings disrupted millions of voice and data lines stemming from Verizon's south Manhattan hub, including those of the New York Stock Exchange.

When the dust settled, many industry observers predicted the ordeal would force businesses both within and beyond New York City to reconsider the violability of their own IT systems and reconfigure them with greater storage and redundancy, complete with applications that could restore service in an emergency. And just as consumer markets expected a rise in cell phone use after Sept. 11, commercial markets anticipated a jump in teleconferencing to treat the country's new aviophobia.

In the weeks following the attacks, at least, things seemed to be moving in that direction. Large and mid-sized businesses flocked to consultants to find the weak links in their networks and protect them from future catastrophes. In an October 2001 survey published in CIO magazine, 65% of corporate IT directors said they planned to increase disaster recovery spending plans in 2002.

But throughout the next year, many of those plans fell through. “We expected an immediate uptic after 9/11,” said Bill Hummel, director of business recovery and continuity services for Verizon's enterprise solutions group. “It didn't materialize right away.”

Todd Tanner, president of Tanner Group, a telecom consultancy for large enterprises, put it more bluntly: “After 9/11, IT just died.”

After meeting with consultants, corporate IT leaders had a tough time convincing their bosses to pay for more redundancy and safeguards against hypothetical dangers when the economic downturn posed a more immediate threat, and the way to fight it was to cut costs anywhere possible. Even the U.S. Department of Defense, a Tanner Group customer, scaled back redundancy in some areas to trim expenses.

“Even for companies in New York, where the disasters occurred, there's a lot of talk about business continuity from management, but it's still largely IT-driven, and commitment from a corporate dollar perspective is lacking,” said Zeus Kerravala, vice president of enterprise infrastructure at The Yankee Group.

A study conducted by Digital Research for AT&T revealed in August that a fourth of all American businesses medium-sized and larger still do not have plans for business continuity. The corporations with the most pressing telecom needs (e.g., large financial institutions) typically had strong disaster protection plans in place well before Sept. 11 and didn't need to overhaul their systems for a war on terror. Accounting firm Ernst & Young, for example, lost an office at 55 Broad Street in Manhattan when the Trade Towers fell. Still, after Sept. 11, “We made a few tweaks, but no major changes,” said Bob Uhl, E&Y's director of telecommunications.

Less resilient firms have since begun searching for cost-effective ways to protect themselves, which sparked some interest in IP VPNs and storage area networks, according to analysts. But the price tag dictates the decision.

“Rather than looking for ROIs 12 months or two years out, nobody is buying off on anything that doesn't give them a measurable ROI in at least three or four months,” said Tanner. “We call those ‘instant winners.’”

Perhaps the best example of an instant winner is teleconferencing, which surged post 9/11, making it perhaps the only sector of commercial telecom to justify the optimism it garnered last fall. Teleconferencing was already on the rise before last September as companies looked for ways to save capital and boost productivity, but the inconvenience of air travel after the attacks forced more companies to consider using it, especially for meetings between people that had already met face-to-face.

In an online survey conducted in August by Wainhouse Research, business travelers said face-to-face meetings were down 16% this summer, having been replaced by 12% more audio conferencing, 24% more videoconferencing and 62% more Web conferencing. Sixty-four percent said audio, video and Web conferencing were “very important” to them; before Sept. 11, that number was only 44%. Uhl says videoconferencing among E&Y employees “backed off a little” in recent months, but is still 50% more common at his firm than a year ago.

Wainhouse polltakers said they used Web conferencing, the smallest but fastest-growing conferencing tool, for 8.5% of their meetings, up from 5.3% before September 11. Applications that combine PowerPoint presentations with voice (no video) are particularly popular with frugal executives.

Businesses are also beginning to spread out their data centers geographically (often among separate power grids) as a relatively inexpensive protection measure. For example, software vendor E Commerce Group, whose New York data lines were disabled on the day of the terrorist attacks, is now building a facility in Charlotte, N.C., to back up the main one in New Jersey.

The downside is the bandwidth costs of such long-distance data transfer, but businesses can alleviate that cost by altering the applications that access that data. Most companies making this move are running their own backup data centers, said Kerravala. “The uptake with carrier services will be in 2003.”

Service providers aren't waiting that long. Verizon's Hummel launched a business continuity road show in January, taking the IT lessons of 9/11 to places like Minneapolis and Tampa, Fla., where the threat of terrorism is less tangible. Like BellSouth, Verizon is partnering with IBM and EMC to sell business continuity products such as customer-redirection, which reroutes calls from a damaged office to another location. Competitors such as Savvis Communications are making the argument that IP-based applications are the key to continuity because they can redirect calls much easier than legacy systems.

“IP brings complete portability,” said Savvis CEO Robert McCormick. “You can move an office from New York to St. Louis and keep the same phone numbers.” E&Y began using VOIP apps a year and a half ago, Uhl said.

Barely a month after the attacks, a Wall Street Journal article argued that the loss of voice service in parts of Manhattan following the attacks underscored the need for multiple carriers. But these days, alternate carriers carry their own risks. Tanner routinely recommends businesses choose a secondary carrier for backup, but lately, he said, it's tough to find a local carrier that isn't flirting with financial ruin.

“We have a hard time recommending our clients do business with anyone who's not making money right now,” said Tanner. “We've recommended a number of clients get ready to replace [CLEC lines] as soon as the contracts expire.”

In addition, some businesses don't realize the carriers they choose for backup service are often just reselling service from ILEC facilities. In that case, if the central office is damaged, said McCormick, “It doesn't matter if you bought it from three carriers. You're going to be out of luck.”

And these days, when businesses consider the need for disaster recovery measures, they're more often worried about bankrupt telecom providers than international terrorism.