Two weeks after Hurricane Sandy barreled up the East Coast, devastating parts of densely populated New York and New Jersey, the full costs of the megastorm are still being assessed. The "once-a-century" storm left more than 8 million homes and businesses without power, shutting down everything from oil refineries to transportation to the stock market. The disruption could shave a half percentage point off of GDP.
Behind those statistics are millions of businesses, big and small, grappling with new questions disaster preparedness in an age of extreme weather. And, increasingly, they are concluding that the answers may lie in the cloud.
Take Springboard Public Relations in Marlboro, N.J., about 10 miles from the coast. The firm lost power on Monday night before Sandy even made landfall. The power was finally restored on Sunday, only to go down again when a Nor'easter dumped a foot of heavy snow on the storm-tossed area three days later.
Like many firms, Springboard maintains its own servers on-site, running key applications like corporate email and accounting. So, without power, employees were unable to access corporate email and payroll checks could not be cut. The firm's eight employees managed to cobble together a communications system using Gmail, Twitter and text messages.
"That was an anxious time," says Domenick Cilea, Springboard's president. "You don't know what business inquiries or media opportunities you're missing. If they don't know how to reach you on Gmail, your SOL."
The New Normal
Hurricane Sandy is but the latest reminder of the increasingly frequent extreme weather events – from tornadoes to drought-fueled wild fires - that have the potential to disrupt business and shut down operations. And it's prompting more businesses to look to the cloud.
For Cilea, it's not a question of if the firm will move to the cloud, but how. "Should we move to a professionally managed data center, where there is a better chance of having it be operational, or go to a completely hosted solution and not have to worry about it at all?" asks Cilea. While he mulls that issue, he is issuing more iPads and tablets with 3G and wi-fi capabilities to boost chances that employees will be able to communicate in the event of another disruption.
Businesses have been moving to the cloud in varying degrees, first for digital media and collaboration, and more recently for key business applications, IT functions and all things mobile, says Rick Vilars, Vice President, Datacenter & Cloud at research firm IDC. But Sandy, he says, could act as a "trigger event" to accelerate that move.
In a Nov. 7 research note, Villars and a colleague explained the cost benefit analysis that will favor the cloud: "Datacenter teams can no longer plan for just the ‘worst case' scenario but the 'I can't believe that would ever happen' scenario as well. … The real question is how many organizations have the capital and time to make these types of recalculations and changes. More than ever, they will be looking to service providers (collocation, hosting, and cloud) to take the lead in providing more robust datacenter environments."
Of course, the cloud alone is not a panacea. Some third party data centers experienced outages – notably some in lower Manhattan that were flooded, causing media outlets that used them, including The Huffington Post and Gawker, to go dark. But, as Villars points out, the bigger hosting services can better afford to provide backup power and redundancy across geographic locations, lessening the risk of an outage.
"To me, the cloud is where businesses need to be for continuity and disaster recovery," says Jim Bourke, a partner at Withum Smith & Brown, a CPA firm based in Princeton, N.J. There are many strategies companies can take to back up and protect critical data and applications, he says, but "the cloud just simplifies the process."
Bourke, who oversees Withum's IT operations, began moving mission critical applications to the web around seven years ago. Today, the firm's tax applications and client files all reside in the cloud, hosted by a service provider that has full redundancy and backup. So, although many of the firm's offices scattered across New Jersey and elsewhere lost power, its 450 employees were able to access client data from other locations. As a result, they were fully functional, and the firm lost no revenue. "Not all my partners were big believers in the cloud when we migrated," says Bourke. "But today they are."
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