Measuring The Toll

Some have gone out of business and are now working for other solution providers. Some are struggling to rebuild not only their clients& businesses but their own. And a small number are experiencing a new business boom. No one knows precisely how many solution providers have been impacted on the Gulf Coast, but of the 10 solution providers CRN tried to contact for this story, three could not be reached, one had closed up his shop for the time being and is working for a major integrator, three had been hit hard financially and are struggling, and three are seeing at least a short-term spike in business.

After an analysis of the flood and storm surge caused by Katrina, AIR Worldwide, a risk modeling company based in Boston, estimated property damage alone caused by Katrina will total approximately $44 billion. Solution providers say the human toll taken on their lives after they and some of their employees have lost their homes, combined with the financial impact on their businesses, is incalculable.

“Everybody is dealing with personal stuff and then you&ve got your business stuff and it just overwhelms you,” said Nick Tomba, president of Tomba Data Systems, a Metairie, La., network integrator. “A lot of people can&t handle both so they&re either working all the time or just staying home trying to keep it together.”

Tomba had three engineers and three sales reps before Katrina hit and now is down to one engineer and one sales rep. He expects his $900,000 in annual revenue in 2004 to drop by more than half. Tomba said he had 100 active clients before the storm and, after getting his own servers back up and running and trying to contact clients, he has heard back from only 15.

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Carrollton Technology Partners, a small Web and database design and development shop in New Orleans, had 250 clients before the storm, which will be sliced by more than half to 100, said Christopher Reade, a managing partner. “The short-term economic toll is dramatic,” said Reade. “Ninety-nine percent of all the money we take in comes through the front door with the U.S. mail”—and the mail is running three weeks late. “We&ve had to lean on our credit line almost to the hilt,” he added. Carrollton has a staff of 10 and, so far, all are staying, even though half have lost their homes.

On the Saturday just before Katrina hit, Reade managed to get into his downtown office in New Orleans and download all of his clients& Web sites and databases to his laptop, taking it to Baton Rouge when he evacuated. He then backed up his data to servers in California and New Jersey. He says his clients have been up and running continuously except for about 24 hours of downtime when the generator at his office building ran out of gas.

Ken Magee, president of The Gatling Group, a nine-year-old Metairie, La., solution provider, has gone to work for Applied Computing Technologies (ACT), a Falls Church, Va., systems integrator that is providing technology support for FEMA, which is coordinating the disaster-recovery effort. Magee says he is grateful to ACT and FEMA for the job.

ACT CEO Bob Hansen said the $7 million integrator, which works hand in hand with FEMA providing technology support, had 75 employees before Katrina struck and now has 160. Hansen estimates that as much as 33 percent of the IT personnel ACT has hired were directly impacted by the Katrina disaster. “We wanted to get skilled people in that area that needed help and give them a job,” he said. “That releases some of the personal pressure affecting those people.”

At press time, with Hurricane Wilma expected to hit the Florida coast in a few days, Hansen was worried about the impact of yet another disaster. “This is going to stress the system further if it rakes Florida,” he said. “There is an awful lot of people and equipment already deployed in response to Katrina and Rita. You only have so many mobile communications facilities and skilled people.” That said, ACT is ready to respond if FEMA calls. “We are trying to have a bullpen available,” he said.

Alex Freund, president of 4IT, a Miami solution provider, said he and his clients are prepared if Wilma strikes. In fact, Freund said last Thursday that Wilma marks the fifth time this year 4IT has implemented disaster-recovery plans.

“For Wilma, we&re lucky. Business owners can get a full work day in tomorrow and we can do the shutdown procedure after 5 p.m. [on Friday],” he said. “We&ll have enough time because we&re not supposed to get hit until late Sunday, if at all.”

4IT will perform the shutdowns for about 30 of its 160 accounts, Freund said. The majority are very small businesses that can do it themselves, he said. “The good news is most of it is relatively quick,” he said. “We can do a full shutdown in half an hour to an hour.”