AMSTERDAM - Companies have a 50-50 chance every year of their key computer systems failing for more than two hours, but there is little risk that their data will be lost forever, security and risk specialists said on Wednesday.

The World Trade Center attacks in New York in 2001 made companies around the world acutely aware of their need to have a disaster recovery plan.

Most outages, however, are the result not of wilful acts of terrorism, but of failing hardware, telecommunications or software, according to a global survey conducted by Ernst & Young, a unit of Cap Gemini.

Next on the list are computer viruses, mentioned by one in five respondents, while natural disasters were mentioned by four percent. Terrorism was mentioned by fewer than one percent.

Hitachi Data Systems, a Japanese data storage computer maker in the Hitachi group, has seen its disaster recovery software sales jump since the September 11 attacks.

Over half of its computers sold in the United States now have disaster recovery software, compared with 15 percent prior to the attacks.

The software lets companies quickly retrieve data from computers hundreds of miles away and continue their business, whether they are selling concert tickets or insurance, said John Hickman, Hitachi's business continuity manager for Europe.

Emerging legislation and litigation, emphasizing the need to keep electronic records for legal purposes, is also driving sales.

DISASTER WILL STRIKE

Still, 17 percent of companies polled by U.S. storage management software maker Veritas Software have no disaster recovery plans, and a quarter of those who do have them never test their systems, said Chris Boorman, the company's European marketing vice president.

Companies should assess the risks they are running and then decide if they want expensive back-up services, but even these systems cannot always protect companies if their computers fail, said Lisa Hansford-Smith, an adviser on corporate security risks at insurance broker Marsh, a unit of Marsh & McLennan.

British Airways said it had a power outage for two hours last month, bringing down worldwide check-in and baggage systems. Eleven flights from London's Heathrow Airport were cancelled and others were delayed, despite the existence of recovery plans.

"One of the critical elements in a business recovery plan should be how to handle the effects and the press if it does go wrong," Hansford-Smith said.

Negative publicity and damage to the brand were the two top reasons why almost a quarter of companies hit by an outage would keep it quiet it they could, the Ernst & Young survey found.

It is rare, however, that data gets lost altogether and that company operations are brought to a halt, the specialists said.

"An outage may have cost a few million euros, but the data usually exists somewhere else, either electronically or on paper," Hickman said.

The exceptions usually come from smaller companies.

Hansford-Smith recalls one U.S. company that sacked its information technology manager, who kept all the back-up data at his home and destroyed it when he left the firm. It took the company more than a year to retrieve the data it lost.

® Reuters

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