Kristen Noakes-Fry Product Report 6 September 2002 Historical Mainline Disaster Recovery Services Equipment Replacement (Quickship) Services Summary Mainline Disaster Recovery Services (formerly El Camino) offers quickship equipment replacement for hardware, software and storage devices to ensure continuous operation of clients facilities. Table of Contents Overview Analysis Pricing Competitors Strengths Limitations Insight List Of Tables Table 1: Overview: Mainline Disaster Recovery Services Table 2: Features and Functions: Mainline Disaster Recovery Services Services Table 3: Price List: Mainline Disaster Recovery Services, Inc. Services Table 4: Quickship Programs Gartner Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.
Corporate Headquarters Mainline Disaster Recovery Services, Inc. 20931 Burbank Boulevard, Suite B Woodland Hills, CA 91367, U.S.A. Tel: +1 800 598 8808 Fax: +1 818 226 1846 E-mail: disaster.recovery@mainline.com Corporate Headquarters Mainline Information Systems, Inc. 1700 Summit Lake Drive Tallahassee, FL 32317, U.S.A. Tel: +1 850 219 5000 Fax: +1 850 219 5050 Internet: www.mainline.com Overview Mainline Disaster Recovery Services (formerly El Camino) represents an alternative to hot-site or cold-site contracts or a value-added enhancement to such arrangements since any move to a cold site will require an up-to-date configuration of replacement equipment. The Mainline service can also be implemented as a stand-alone plan in cases in which businesses can withstand interruptions in data processing services for one to five days. Features of Mainline s emergency equipment replacement service include: An accurate list of the subscriber s current equipment needs is always on file. Delivery of replacement equipment to a site of the subscriber s choice is guaranteed within one to five days of notification. Subscribers have the opportunity to purchase, lease or rent this replacement equipment at fair market value. Mainline Disaster Recovery Services is a unit of Mainline Information Systems, a privately owned company and IBM Business Partner specializing in new and used IBM hardware and software sales, storage devices, technical support, maintenance, and e-business services and financing. Table 1: Overview: Mainline Disaster Recovery Services Service Type Service Description Emergency computer equipment replacement and quickship. Guaranteed prompt location and delivery of emergency computer equipment replacement of mainframe, midrange and peripheral hardware. Mainline is on the Federal Government s Approved Agency List. 6 September 2002 2
Table 1: Overview: Mainline Disaster Recovery Services Date Service Announced Equipment Supported Certifications Equipment Inventory Equipment Sourced Equipment Delivery/Turnaround Time Guarantee 1983. IBM and IBM/plug-compatible mainframe, and midrange hardware. Equipment from other companies, such as Dell, Sun, Compaq, Hewlett-Packard and Unisys are handled on a limited basis. Auditor, Federal/GSA-approved program. Customer inventory lists kept on file. A supply of the most commonly needed equipment is kept in Mainline s physical warehouse. Other equipment is sourced agreements with a network of suppliers. One to five days guarantee good on IBM equipment within the U.S. One to five days guaranteed delivery. Mainline offers to pay a penalty of $10,000/day (up to $250,000) for late delivery. Table 2: Features and Functions: Mainline Disaster Recovery Services Services Contract with Mainline Maintaining Inventory of Customer s Equipment Needs Locating Correct Equipment Delivery Installation Warehouse Management Leasing Arrangements Option to Purchase Subscriber agrees to lease, rent or purchase necessary emergency replacement equipment from Mainline (a contract must be in place before any equipment can be delivered). Mainline receives a regular inventory report from each customer with a complete configuration list that displays everything the customer uses. When a client declares a disaster, Mainline using the client s inventory report searches its inventories for identical replacement equipment located throughout the U.S. Delivery of purchased, leased or rented, equipment to the customer s chosen site within one to five days. The customer is responsible for arranging for installation, programming, insurance and equipment maintenance. Mainline s Asset and Trading Department keeps a certain percentage of equipment in stock. Once a piece of equipment is sold from that inventory, warehouse management is required to purchase an exact replacement within 24 hours. In addition, Mainline has 24-hour contracts in place with other equipment inventory sites, which will open their doors at any time to allow Mainline immediate access to inventory. Computer equipment may be leased for terms up to five years. If the subscription fee has been paid up to a year prior to the disaster, the customer may apply that one-year fee to the purchase or lease of Mainline s replacement equipment. Analysis In April 2001, the Disaster Recovery Division of El Camino Resources was bought by Mainline Information Systems, a privately held information technology solution provider headquartered in Florida, with international offices in Canada, South Korea and China. Mainline specializes in IBM midrange and 6 September 2002 3
complementary metal-oxide semiconductor (CMOS) S/390 mainframes, as well as a number of applications, services and support programs. In 2001, in addition to buying El Camino, Mainline acquired Communication Software Inc. (COMSI) and Real Solutions. These acquisitions greatly enhanced the company s resources to sell the IBM product line, including the iseries, pseries, zseries and storage products. Mainline s Disaster Recovery Service has been in business since 1989 as El Camino and has maintained a reputation for efficient emergency equipment replacement, with over 500 subscribers currently covered by the service. On average, Mainline customers declare one to two disasters overall each year. Mainline s services are primarily targeted to the North American market, but equipment can also be shipped to countries in the Asia/Pacific region and Canada. There is in-country coverage throughout Canada, South Korea and China. The replacement equipment program is administered from its division headquarters located in California. In its area of emergency equipment replacement services for IBM products, Mainline Disaster Recovery Services remains in a very strong position. Mainline s emergency equipment replacement service can be used as an organization s primary or supplemental business continuity plan. Other equipment vendors may offer contracts for equipment replacement dependent on the model, and some business recovery companies provide shared access to equipment. Importantly, many other vendors generally do not offer an ironclad replacement guarantee not even for their own equipment. While most suppliers offer faster delivery time than Mainline, the best they can offer is frequently a best effort attempt to match the client s equipment within a reasonable time. Mainline s plain vanilla equipment-only approach may not be sufficient for a client that needs more support from the equipment supplier. Competitors such as GE Disaster Recovery Services and Comlanta Business Recovery Services offer assistance with disaster recovery planning, as well as providing installation and setup assistance at the client s recovery site. Pricing Table 3: Price List: Mainline Disaster Recovery Services, Inc. Services Service Description Price Initiation Fee Fee due on signing the agreement: Subscriber and Mainline agree to develop inventory list. Subscriber agrees to lease, rent or purchase necessary emergency replacement equipment from Mainline. Contract must be in place and initiation fee paid before any equipment can be delivered. $1,500 6 September 2002 4
Table 3: Price List: Mainline Disaster Recovery Services, Inc. Services Service Description Price Monthly Subscription Fee Equipment Prices Fee for Declaring Disaster GSA Pricing Yes. Competitors Fixed fee regardless of inventory. A 5 percent discount is offered on the yearly fee if it is paid in a lump sum in advance. Rent or purchase of equipment from Mainline. Notification fee to officially declare disaster. $300 Current market price for equipment listed in inventory report. Mainline offers financing/loans for purchase and lease of equipment through the regular purchase/lease part of the parent company, Mainline Information Systems. In the event of a disaster, subscription fees exclusive of the initialization fee for one year prior to the disaster may be applied toward the purchase, rent or lease of equipment from Mainline. None Major competitors in equipment replacement also called quickship programs comes from vendors such as: Table 4: Quickship Programs CIT Technology Rentals and Services (TRS) (A unit of CIT Group, Inc.) Located on the grounds of Dallas/Fort Worth International Airport in Texas. Ships within hours of notification via the air or motor freight carrier of the client s choice. Computers shipped in reusable, heavy-duty, dual-wall cartons for safety. All equipment functionally tested or calibrated properly for immediate use. 6 September 2002 5
Table 4: Quickship Programs Comlanta Business Recovery Services GE Disaster Recovery Services(GEDRS) (Formerly GE Capital IT Solutions) Rentsys Technology XIOtech Professional Services (wholly owned subsidiary of Seagate Technology) Quick Ship replacement services deliver a complete, pre-configured backup computer system IBM, Sun, Compaq, HP, Intel, Cisco to client s site or to one of Comlanta s hot site locations, including Baltimore, Maryland; Boca Raton, Florida; Chicago, Illinois; Dallas, Texas or Irvine, California. Delivery within 24 to 48 hours of the client s call. Also provides engineers to help get the system up and functioning. Has provided shippable solutions for over a decade. Customized shipping cases allow for the shipment of multiple CPUs simultaneously. Shipment tracked via a GEDRS service partner. Guarantees 24 hours, from disaster call to installation. DropShip service provides fully configured, ready-to-use replacement equipment in the event of a client reporting a disaster. Offers planning and recovery services in conjunction with Science Applications International Corporation (SAIC). XIOtech provides a full suite of advanced storage and system solutions to ensure organizations maintain access to their missioncritical data in the event of a disaster or service interruption. Strengths Guarantee of Prompt Delivery Delivery of IBM replacement equipment is guaranteed within one to five days. Non-IBM equipment is delivered within five days if possible, but not guaranteed. The client is promised monetary reimbursement up to $250,000 if Mainline fails to deliver within five days. Also, Mainline guarantees a return phone call within two hours of being notified that a customer is declaring a disaster. Track Record Mainline Disaster Recovery Services has over 20 years of experience in emergency technology hardware replacement. To date, Mainline has been successful in meeting all of its contractual obligations with its clients. Inexpensive Alternative to Hot or Cold Site It is not unusual for monthly subscription rates for hot-site services to fall within a range of $500 to $20,000 per month. In fact, Gartner is aware of several organizations that are paying more than $30,000 to $50,000 per month. However, Mainline charges a flat rate of $300 per month, regardless of the size or complexity of the equipment replacement. In addition, it is customary for hot-site vendors to charge a hefty fee when a client declares a disaster, while there is no disaster declaration fee associated with the Mainline program. Shortens Time at Hot Site For companies that have contracts with hot-site vendors, Mainline s services can cut down the number of days spent at an expensive hot site. Subscribers occupy the hot site only until Mainline has delivered the equipment to a commercial cold site, the client s cold site or other leased space arranged for by the client. 6 September 2002 6
Limitations Equipment Replacement Only Mainline is a single-service disaster recovery vendor. For other services, such as hot sites, off-site storage, benchmarking and consulting, the client must seek other sources. No Installation or Setup Services Provided While Mainline guarantees the delivery of the equipment configuration to the specified site, the customer is responsible for locating and preparing the site, paying delivery and handling costs and arranging for installation, programming, insurance and equipment maintenance. Focus on IBM Equipment The breadth of equipment handled is predominantly IBM, with Compaq, Dell, Sun, HP and Unisys hardware handled to a lesser degree. Mainline s guarantee does not apply to non-ibm equipment. Insight Mainline s equipment replacement service is an inexpensive alternative to hot-site or cold-site services. Its many years of experience replacing IBM equipment with Compaq, Dell, Sun, HP and Unisys hardware also available combined with its guarantee of delivery within one to five days makes Mainline a vendor to consider as part of an organization s business continuity plan. 6 September 2002 7