Hurricane Sandy -- one of the most expensive storms ever, causing an estimated $50 billion in damages -- may have devastated New Jersey and parts of New York. However, it also may turn into the poster child for the why of cloud-based disaster recovery and business continuity services, according to providers, and financial institutions are among the companies most likely to take the plunge.
Witness the $1.8 billion Municipal Credit Union, which primarily serves New York City public employees. Its Cortlandt Street servers were swamped. So were its backup servers across the river in New Jersey. MCU was wiped out for days, and customer howled.
MCU was one of hundreds of credit unions and community banks in New Jersey and New York that took it on the chin as Sandy knocked out power lines, telephone lines, and just about everything else across a huge area.
Financial institutions know they are expected to have little downtime -- or, ideally, none at all. But as a group, they have been cloud-phobic. Worries about the security of data that is not housed on the premises are the industry norm. But Sandy and its grim MCU-type tales may change everything.
"We already see financial institutions looking into cloud-based storage," Ram Shanmugam, a senior director at SunGard Avallability Services, told us.
Most institutions that had implemented cloud-based disaster recovery and business continuity services before Sandy were able to resume services quickly without missing many beats.
"After Sandy, companies with cloud-based DR were in business the next day if they had power," Robert Brower, a vice president at the disaster recovery provider CommVault, told us.
The hurricane hit New Jersey on a Monday at 3:00 p.m. "By 3:00 p.m. Tuesday, we had clients back in business."
Shanmugam said the hurricane is "triggering a big rethink of what's adequate." Backup facilities located 200 miles from the primary site used to be deemed safe, but Sandy's huge footprint made a mockery of that rule of thumb. "Customers will look beyond 200 miles."
But the cloud alone is not necessarily the cure, he said. "It depends on where the cloud infrastructure is." Savvy customers will make serious inquiries about the location of their cloud. These solutions, of course, require servers, power, and fiber, but location (along with redundancy) will be critical to a cloud's dependability in a catastrophe.
Jennifer Walzer, CEO of the disaster recovery company BUMI, knows firsthand about these issues. Her building in New York's financial district was swamped by 35 feet of seawater, and key infrastructure was knocked offline. But her company and its clients lost essentially zero uptime.
"Everything switched over to servers we operate in Toronto," she told us. (BUMI also has servers in Vancouver.) "For us and our clients, it is as though Sandy never happened." And her company did not have "clients driving around with piles of tapes in the trunks of their car."
That, incidentally, was not uncommon after 9/11, which Brower said may have marked the beginning of contemporary disaster recovery approaches. "Recovery then was tape driven, and it was measured in weeks, possibly months," he said. "After 9/11, disaster recovery became the hot topic. It will happen after Sandy, too."
He knows of one very large bank that is shopping for a cloud-based DR provider. That is an immense change. The biggest banks have always sneered at cloud storage, due to the enormity of their files. Sandy may have changed that attitude forever.
"Companies that replicated their data in private clouds in particular immediately saw the value after Sandy," Brower said. "This is a sea change moment. It really has changed everything for cloud storage."
Robert McGarvey has been online and writing about the Internet for nearly 25 years.
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