Sungard's New FocusSungard's New Focus

SunGard Data Systems Inc., SunGard Availability's parent company and a provider of managed services to the financial-services industry, isn't immune to the economic doldrums. Though revenue in the third quarter ended Sept. 30 grew 18% to $92 million, and net income was up by about 15%, the vendor admitted it suffered from flat IT spending and only grew as a result of acquisitions.

SunGard Data Systems claims 20,000 customers worldwide, many from its Comdisco acquisition, and counts 47 out of the world's 50 largest financial-services companies as customers. The company realizes it must ride with customers that want to diminish investments in pure backup facilities and implement processes around business continuity. SunGard Data Systems processes 3 million trades daily on its systems and maintains 75 data centers, 50 mobile data centers, and more than 15,000 end-user recovery positions in Europe and North America.

Some former Comdisco customers are crying foul when renewing service contracts. They say SunGard is forcing new services on them to ratchet up prices. An industry expert explains the disconnect between SunGard and some customers. "Some old Comdisco deals go back to the dark ages," says Carl Greiner, VP at Meta Group. "Some of its contracts are older than heck and have nothing to do with today's prices or levels of service." Windows, a large part of most infrastructures, is absent from those old contracts, many of which are eight years old. Even if a customer only wants mainframe support, that platform's cost has typically grown 20% each year, Greiner says. Every customer has different needs, he says, but few devote the whole infrastructure to the information-availability process, and they shouldn't. Companies that need it the most will mirror their data centers, and these companies could still use SunGard for remote offices, secondary servers, and less-than-critical apps. "Some people aren't allowing for today's environment," Greiner says. "Contracts just vary on what customers really need."

SunGard CEO Simmons claims he's unaware of any brute-force negotiating tactics. "Some customers have been with us for a couple of decades," he says, "and in three years some will migrate to three different platforms."

One customer started working with SunGard two years ago, choosing it from among four players for its national reach, stability, and ease in cutting a deal. Alan Leib, president of Stats Inc., a 20-year-old provider of sports statistics to major broadcasters and individual sports enthusiasts, started with SunGard and its disaster-recovery service, but got on board with information availability when the National Football League season began over the Labor Day weekend.

Leib was prepared for the increased interest in fantasy football, but he never dreamed he'd face double the demand and need double the bandwidth. "We held up the first weekend, but it pushed us beyond our comfort zone," Leib says. "We made the first call to SunGard Tuesday and were up and running by Friday of that week." Since then, SunGard has been Stats' Web-hosting firm.

Leib credits the mutual knowledge that Stats and SunGard share with each other as the reason for such timely implementation. "SunGard engineers do the work, but we manage it all remotely," he says.

Whatever the service SunGard provides, the company appears to take its responsibility to customers very seriously, as illustrated by an exchange in its New York megacenter during our recent visit. VP Guddemi pointed to a customer-command room and said it was one customer's entire infrastructure. When asked about the man working in the room, Guddemi indicated that he was from the customer company. A few seconds later, catching himself, he said, "But you can't talk to him." It's that kind of dedication to customer privacy and security that SunGard hopes will keep its customers happy--disaster or not.