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Down Economy is Prompting Upper Management to get more Involved with Disaster Recovery

There were a lot of interesting statistics that came out of the just released June 2009 study that was done by Applied Research on behalf of Symantec Corporation. However the one stat that caught my attention was the increasing involvement that upper management is taking in disaster recovery within enterprise organizations. Executives in North America increased their participation on DR committees by almost 50% in the last year (67% in 2009 versus 46% a year ago) while globally executives more than doubled their participation on these DR committees from 33% in 2008 to 70% in 2009.

During the month of June, Applied Research contacted 1650 corporations worldwide that have at least 5000 employees with 350 of these enterprise organizations from North America. While the study did not cite any exact reasons why executive participation increased so dramatically in 2009, I suspect the down economy that all enterprise companies are working their way through right now probably had as much to do with increased executive involvement as anything.

Since credit is tight, new growth opportunities are hard to come by and many bills are working their way through Congress that will likely inhibit external growth, executive management appears to have more incentive and time to focus on internal processes and get their houses in order. As they do so, they are focusing on some long standing problems within their organizations with disaster recovery apparently showing up for many on their list of priorities.

Their increased participation and focus on DR is now having an impact on how these organizations are budgeting for disaster recovery initiatives in 2009 and 2010. Budgets for disaster recovery initiatives generally include money for such items as backup and recovery software, clustering, archiving, spare servers, replication, tape costs, services, DR plan development and offsite costs.
Despite the fact that many of these companies are planning to decrease their budget over the next 12 months (Globally – 42%, North America – 29%), many more are seeing their DR budgets hold steady (52% globally and 66% in North America) while a small percentage are even seeing an increase in their budgets. This is notable considering that most organizations are seeing an overall downturn in their total revenues so just staying flat is an accomplishment in this environment.

However I differ slightly from Symantec as to why this is occurring. In a prepared statement, Symantec said, “Symantec believes that some of this increase from previous years and attention on DR may be due to DR becoming a competitive differentiator, as well also a number of other factors including the size of DR budgets and the impact on customers of downtime that leads executives to focus more on keeping existing processes running smoothly.

I agree in part with this conclusion but I think it goes beyond DR just becoming a competitive differentiator and the impact on customers of downtime. These are both true statements but I think as executive management gets more involved with their DR committees, they are seeing the true state of DR within their organizations and they are getting a reality check. They are discovering that after spending millions of dollars on hardware and software over the years, they still can often only recover a fraction of their applications in the time that they need to recover them. As a result, their entire business is at risk if they do not fix this.

The good news is that it appears that as executive managers engage in these DR committees, they are finding out exactly what their company’s internal DR requirements are and what additional software and hardware they need to procure to fix their DR situation once and for all. 

This I see as the more likely reason as to why so many DR budgets are staying flat or even increasing in 2009 despite the down economy. DR now has a voice and a champion in the ranks of upper management and the need for DR is being articulated in terms that other executives on the board can understand, appreciate and justify the allocation of additional funds.

This bodes both good and bad for IT providers. Short term, it looks to be good news as this survey indicates. Enterprise organizations are going to fill their gaps in DR so they have a DR plan that works reliably. Conversely, as this survey also indicates, once these companies make these investments and fix their current DR environment, they plan to decrease spending in 2010 because they have brought their DR environment and supporting processes back up to snuff so they do not need to budget as much money going forward into 2010 on DR initiatives.

The cost of downtime and more stringent recovery time objectives (RTOs) may be the reasons that enterprise organizations are citing as to why they are giving new priority to DR requirements. Maybe, but these reasons for doing DR have been around for at least the last decade.  A more likely reason is that as organizations cut back and refocus inwardly, they are seeing that DR is one area that needs attention. So by making some strategic investments in DR now, they can plug some existing holes, ensure their DR processes run more efficiently and potentially spend less money on DR in 2010 if they spend wisely now.


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