SunGard, already the world's largest disaster recovery services provider, has been taking full advantage of volatile market conditions post-11 September to snap up competitors in the business continuity sector, many of whom were counting on a terrorist-inspired revival. In April, the Pennsylvania-headquartered company swooped on the UK's biggest disaster recovery company, Guardian iT, absorbing one of its largest European rivals. The price, at $240 million, may have looked high, but that included dealing with the $161 million Guardian had amassed in bank debt, as well as its finance lease obligations.
Guardian, with 2,700 customers throughout Europe took the decision in 2000 to invest most of its cash reserves in building new data centres to support web hosting activities. As significant demand failed to materialise, the company was forced to shut down its web hosting business – coincidentally in September 2001, just as it started thinking that companies would begin gearing up their disaster recovery coverage.
In November 2001 SunGard also acquired the business continuity arm of Comdisco, stealing it from under the nose of Hewlett-Packard (HP). SunGard moved in with a $850 million winning bid after HP became distracted by bigger fish (namely, Compaq).
Another company taking advantage of Darwinian economics is newborn software and services vendor Divine. It has grown fast by building a portfolio from near-defunct companies – many of which have built solid collaborative technologies, in areas such as content management and customer interaction software, but which ran out of money or marketing ideas. In April, Divine extended the services that support this portfolio with the acquisition of e-services consultancy Viant, paying a mere $86.4 million for a company that was once valued in the billions. Viant came to prominence in the late-1990s along with a host of other Internet consultancies such as Scient, Razorfish, and the now bankrupt MarchFirst (the assets of which were acquired by Divine in mid-2001).