US financial services companies are leaving their New York offices
and looking to decentralise their core systems in the aftermath of
the 11 September attacks.
There is a new emphasis on employees' ability to work from remote
locations using virtual private networks, and ton the geographical
separation between office locations to diminish the impact of
future disasters.
Some companies are moving their offices and IT operations out of
New York City and into surrounding suburbs.
Merrill Lynch is moving its primary data centre from new York's
Manhattan to Staten Island, which is on a different power grid,
according to Marvin Balliet, first vice-president and chief
financial officer of the firm's technology group.
Another big Wall Street firm, Morgan Stanley Dean Witter, which was
in the process of completing a new 1m square-foot office tower in
New York, last year sold the building to Lehman Brothers
Holdings.
Instead it is purchasing the former Chevron oil company
headquarters in Harrison, New York, 27 miles north of its current
offices.
Gregory Ferris, executive director of global business continuity
planning at Morgan Stanley, said the threat of future attacks was
the primary reason for the move.
"We need to be able to react to a disaster, but more important is
we need to mitigate the loss of a single site," said Ferris.
In the aftermath of 11 September the firm was not prepared to have
its trading and backup facilities concentrated in two buildings
located within a city block of each other and dependent on the same
transport and power infrastructure.
The telecoms industries woes are making it easier to decentralise
offices and data centres thanks. The over capacity of bandwidth
means costs of decentralised operations have been reduced.
William James, chief technology officer for Bank of America's
broker/dealer services unit, said his company is implementing a
network to connect data centres in California, Texas, North
Carolina and New Jersey in a two-year, multimillion-dollar project
he expects to be completed sometime next year. The network will be
used for disaster recovery as well as backups.
Currently, Bank of America uses leased T3 lines at a "substantial
cost" to load-balance servers among data centres for disaster
recovery.
"There's a one-third reduction in cost by [using disaster recovery
servers for load balancing] versus having all your disaster
recovery boxes in the same data centre. They're there just as space
heaters that aren't being used," James said.