September 11: The lessons learnt - decentralise and survive

US financial services companies are leaving their New York offices and looking to decentralise their core systems in the...

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.

Read more on IT risk management