New opportunities for computer firms

NEW YORK, SEPT. 20. Just six hours after two jets slammed into the World Trade Center on September 11, one securities firm crippled by the attack ordered 200 new PCs from Dell Computer.

A surge of orders soon turned into a flood, and Dell immediately stepped up production at its plant in Austin, Tex. It has been running its factories day and night since then to satisfy the demand touched off by the collapse of the twin skyscrapers, Dell executives said.

It will be some time before the full loss of human life is known. It will be even longer before property losses can be assessed. But here is one small but staggering part of the cost: securities firms alone will spend at least $3.2 billion - and maybe more than $7 billion - to replace the computer systems destroyed in the attack, according to one detailed estimate.

A partial inventory, according to the Tower Group, a technology research firm, includes 50,000 trading-desk workstations, at $52,000 each; 34,000 personal computers at $2,000 to $6,000 each; 8,000 Intel and 5,000 Unix servers at a total cost of about $370 million; 1,000 Bloomberg L.P. information computer terminals worth an unknown amount; and $300 million in printers, hubs, switches, data storage and other networking hardware. And added to the total is at least $1.5 billion to put the systems together.

Dell said it had sold more than 24,000 servers, laptops and desktop computers as of Monday to replace equipment lost in the attacks. The company sent hundreds of technicians to Manhattan and to the Washington area, converted three 18-wheel trucks into mobile technology support-and-installation facilities, and chartered an airliner to fly parts from Taiwan to its Texas factory.

One company grappling with a sudden shortage of computers was Lehman Brothers, which had to evacuate its headquarters in the World Financial Center, next to the World Trade Center complex. Lehman relocated quickly to office space in Jersey City that is usually occupied by its operations and technology staff, and took up new quarters as well in an undisclosed location in Midtown, said Mr. William J. Ahearn, a company spokesman.

``We can't even begin to imagine how much it will cost to replace what we have lost," said Mr. Ahearn, who spent yesterday on the trading floor. The computer industry has been reeling from a yearlong slump in personal computer sales. But while officials at Compaq, Dell and other major manufacturers were hesitant to discuss the situation, each received large orders in recent days from securities firms and other tenants who had occupied buildings in and around the trade center.

Dell, a nimble manufacturer that has long been a favourite among businesses, had swiftly positioned itself to fill requests from the Pentagon, from businesses affected by the trade center attacks and from disaster-management groups in Washington and New York City that might need extra systems. (Part of Dell's business method is to keep no inventory, relying instead on building models to customer specifications.)

Compaq established what it called a command center in Cupertino, Calif., to take urgent requests from companies in New York and Washington. Compaq, which has a large share of the financial services market, received orders from hundreds of affected corporate clients, said Arch Currid, a company spokesman.By Monday, Bloomberg L.P. alone ordered 2,200 laptops from IBM, 3,000

personal computers from Compaq and 5,000 keyboards and 3,100 customised flat-screen computers from other manufacturers, said Chris Taylor, a company spokeswoman. The equipment is estimated to cost $14 million.

Hewlett-Packard also set up a crisis office for customers affected by the attacks.

Small businesses, like IT Procurement, a consulting and purchasing company in Kew Gardens, Queens, were struggling before the disaster, as were many other technology outfits. Now the company finds itself suddenly in demand, and has begun marketing itself as as an ally in getting past expected logjams.

Benefits to the computer industry could be significant. The Tower Group estimate does not include computer-replacement costs for insurance companies, engineering firms, associations, government offices and television broadcasters that were in the two 110- story skyscrapers. Nor does it count damage done to computer systems at nearby offices caused by firefighting efforts, falling debris and heavy clouds of dust.

Some experts, like Mr. Richard Gardner, a technology analyst at Salomon Smith Barney, believe that the longer-term prospects for the slumping industry are modest. ``Further declines in aggregate demand, both corporate and consumer, are likely to overshadow such repair-related demand," he said.

For now, there is little doubt that computer manufacturers will be busy.

``It's just staggering to me," said Jeffrey A. Moerdler, a lawyer at Mintz, Levin, Cohn, Ferris, Glovsky & Popeo, which shoehorned 50 investment bankers from the World Financial Center into its offices in Midtown. ``We spent thousands of dollars just to get these bankers up and running over this weekend, and this is just temporary. It is not replacing their equipment."

- New York Times

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