DISASTER RECOVERY
JOURNAL

Return to the Winter 2001
Index

P. O. Box 510110
St. Louis, MO 63151
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PUBLISHER &
EDITOR-IN-CHIEF
Richard L. Arnold, CBCP
richard@drj.com

SENIOR EDITOR
Janette Ballman
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EDITOR
Michelle Saab
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COPY EDITORS
Edward H. Pearce, CBCP
drj@drj.com
Richard Sandhofer
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INTERNET /
ADVERTISING
Robert Arnold
bob@drj.com

_____________

Corporate

President/CEO
Richard L. Arnold, CBCP
richard@drj.com

Vice President
Robert Arnold
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CONFERENCE COORDINATOR
Patti Fitzgerald, CBCP
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CONFERENCE REGISTRAR
Merce Knese
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CIRCULATION
Laura Baugh
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INTERNATIONAL
CONTACTS
England: Thom Hetherington
Business Continuity
Phone: 0161-237-1007
thomh@tempus.demon.co.uk

Australia: Anthony J. Harvey
Journal of Business Continuity
Phone: 0011-613-953-0055-8
fax: 0011-613-953-0528
sector@notability.com.au

Japan: Shinji Hosotsubo
Quake Japan Co., Ltd.
Phone: 03-3215-2880
fax: 03-3215-2881

Brazil: Jose Carlos Ferreira
Disaster Recovery Mercosul
Phone: 55 11 3666-9506
conc2000@uol.com.br
ww.drms.com.br

Click Here for a Printable Version

- by Bob Arnold

In today’s fast moving online world, e-business seems to be a never ending money pit. It’s evident when you listen to the news and from the recent closing of many high profile dot com companies. Even when online business seems to be booming, no one seems to be making any money. I believe it has to do with every dot com company trying to keep up with their neighbors and at the same time maintain 100% availability. It has become too critical online to be “the first” at offering something no one else does. This type of technology can be costly.
To research some of the recent closings, layoffs and dropping dot com stocks, you don’t have to look far. Just look to the recent NASDAQ standings. The volatility of the NASDAQ has much to do with the less than satisfying returns of most of the high profile dot com companies. I want to not only talk about the risks involved with dot coms but also how much traditional brick and mortar organizations are spending to keep up with the online demand as well.
When you factor in the amount of startup and marketing costs a new dot com company needs, it seems to be an unbeatable factor. But most of these dot com companies do not forsee how much it will cost to keep that image up and continue to offer new and innovative ideas to keep the surfers coming back. For example, almost everyone knows one or two web based programmers (VB, ASP, etc.). The question to ask is how often they are changing jobs among leading technology companies. One of the largest expenses involved in maintaining that edge is keeping your best people on the payroll and dealing with the inevitable turnover of these very high priced technicians. Next, the price of maintaining the technology and presence online 24/7/365, is critical. Now what was once a simple computing environment has grown into a delicate technology that must be protected. This as I am sure all of us know, is extremely costly. A brick and mortar company spends money as well to protect their online presence, but the entire company doesn’t shut down when your web server burps or hiccups. This is where a traditional organization has a bit more stability than a dot com. This is not to say that many of these dot coms won’t survive; they will. But most have yet to show any signs of pulling their numbers out of the red any time soon.
Another sign of the many risks are, as I’ve mentioned, the recent closings and layoffs of some of the most high profile dot com companies. Some of these big names include :

Altavista Layoffs
Amazon Layoffs
Auctions.com Closed
Autoweb.com Layoffs
CBS Internet Group Layoffs
Covad Layoffs
Furniture.com Closing
Garden.com Closing
Living.com Bankruptcy
Petopia Layoffs
Pets.com Closed
Ziplink.com Closed
Source: Wall Street Journal online at WSJ.com. For the entire list, point your browse here: http://interactive.wsj.com/public/resources/documents/dotcomlayoffs.htm.

According to MSNBC, more than 30,000 jobs in the dot com world have been cut in less than one year. These numbers are staggering, especially for an industry that is still seeing enormous growth and potential. The problem is holding out and maintaining that presence long enough until they can finally turn the corner to profitability.
I feel brick and mortar companies have a much better chance at making it online. Retailers in the online community have already proven this. Many traditional retailers, even with a slower start, will eventually have competitive advantage over almost any dot com organization. Traditional organizations are using the web as a marketing tool, customer service and possibly another revenue stream. If the online ventures don’t make money for some time, the company’s survivability is not in that great of danger, like it is in the dot com world. But in the same sense these larger companies must be wise in their online practices by taking the lessons learned from the many failed dot coms and incorporating them into their own online business continuity plans.
Many brick and mortar companies can utilize the web not only to improve customer service and to take advantage of web-based services, but to cut some considerable operating costs. Larger corporations such as health insurance companies, investment firms, and other corporations which sends customers large amounts of paperwork will begin to reap the benefits of being online if they have not already. Many of these companies have started offering their documents online, which drastically reduces their costs of printing and mailing. In this same scenario it improves customer service, since customers have immediate access to the most up-to-date information regarding their accounts. In addition, customers can surf an organized, secure website at their leisure.
So as the dot com world continues to evolve around us, we in the brick and mortar world have a much better chance of surviving through this sort of business gold rush, but must at the same time protect ourselves from being another online statistic.

I would like to again bring special attention to DRJ.com’s newest web advertisers/sponsors. We appreciate our online sponsors for helping us bring you DRJ.com.

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Disaster Survival Planning Networks: Disaster Survival Planning Network specializes in assisting organizations to prepare emergency response and business recovery plans. Their consultants are nationally certified business recovery, emergency response, and communications professionals. They work one-on-one with top executives, department managers, safety committees, and disaster recovery project coordinators to design, document, implement, and test business recovery plans. They offer many different consulting services including business impact analysis (BIA), creation of emergency response, & business recovery plans, and the design of emergency operation centers.

Midwest Systems, Inc.: For over two decades Midwest Systems has been a leading nationwide reseller of best-in-class computer products and a supplier of value-added systems integration and networking services.

PC Weather Products: Founded in 1992, PC Weather Products grew out of years of research and development headed by George Sambataro to find a more comprehensive way to track and analyze tropical storm and hurricane on a personal computer. This work resulted in PC Weather Products and the line of HURRTRAK Products and services.

Bob Arnold is Vice-President and Webmaster for the Disaster Recovery Journal.