White Paper - e-Continuity: The New Imperative

> Costly emergency measures to restore normal
operations including emergency infrastructure
repairs and contracting for use of temporary
infrastructure
Subsequent costs may include rapid loss of
share value, steep regulatory penalties, and legal
liability as customers or business partners seek
compensation for their losses. Intangible costs,
such as brand erosion, can be equally devastating.
Customer dissatisfaction — with an airline, a
cellular services company, or an online store —
can quickly translate into customer defections.
According to Forrester Research, 58% of first-time
visitors to a Web site will not return if they expe-
rience a problem; 85% of those who encounter a
failure are likely to describe the experience nega-
tively to others.
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In the past, continuity strategies focused on insu-
lating IT operations from the impact of natural
and man-made disasters, such as earthquakes,
flooding, and power failures. Now, in addition to
these threats, there is a new generation of poten-
tial disasters.
Success can be a risk factor. Today, many business
models rely on rapid growth as a strategy for
gaining competitive advantage. Yet when growth
comes, the existing infrastructure often proves
inadequate to the task. America Online provides
the classic example of this phenomenon. In the
mid-1990s, AOL was so successful in recruiting
new members that its infrastructure was over-
whelmed, resulting in busy signals for subscribers
dialing in, dropped connections for those online,
and painfully slow page loads during peak service
hours. Only by moving quickly to enhance its
infrastructure was AOL able to weather a public
relations fiasco that threatened its leadership
position and image.
IT organizations no longer control the entire
infrastructure. Due to the growing interdepend-
ence of business partners across all sectors of
the economy, organizations today are far more
vulnerable to IT interruptions that occur outside
their own enterprises; for example, with supply
chain partners. This trend will escalate further
as enterprises outsource key portions of their
IT infrastructure and operations to Web hosting
providers, ASPs (applications service providers),
and SSPs (storage service providers). (See
Figure 1.)
Outsourcing offers many benefits, allowing an
organization to reduce capital expenditures,
quickly scale its infrastructure, and gain access
to scarce IT expertise. Yet by entrusting mission-
critical infrastructure to third parties, outsourcing
also creates new vulnerabilities. For example,
GartnerGroup estimates that by 2002, 50%
of today’s ASPs will cease to exist, thanks to
flawed business models, failure to execute,
and/or consolidation in a fragmented market.
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Such predictions should motivate potential
subscribers to choose their outsourcing providers
with great care.
Security threats are an ongoing concern. With the
Internet fast becoming the universal platform for
business computing, every organization’s exposure
to security threats has increased exponentially. At
the same time, the sheer number and variety of
threats continue to multiply. Every week brings a
new headline: intrusions into corporate networks,
defacing of government Web sites, fast-spreading
viruses, and massive denial-of-service attacks. As
many high-profile incidents attest, security man-
agement must be an integral and ongoing part of
an organization’s continuity strategy.
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Even as they struggle to support today’s environ-
ment, enterprises must look ahead and lay the
groundwork to ensure continuity for new infra-
structure and applications that are expected to
come online in the next one to three years.
Examples include:
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4
Forrester Research, Is Nonstop Enough? February 2000.
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GartnerGroup, Application Service Providers: 2000 and Beyond, June 2000.