back to article UK arm of Sungard Availability Services goes into administration

The British division of global cloud and data centre services provider Sungard Availability Services was forced into administration amid a hike in energy bills and after failing to renegotiate landlord rental rates. The UK wing called in Benjamin Dymant and Ian Wormleighton of Teneo Financial Advisory on 25 March, according to …

  1. VoiceOfTruth

    The general state of the economy

    Over the last couple of years during the lockdowns it was evident that many shops had closed in central London. They were not closed 'for the duration', they were closed for good. They had perhaps seen the writing on the wall and decided to jump ship while they still had a few quid in the bank rather than spending it to keep open unviable businesses.

    Leicester Square is a fairly horrible tourist area these days, with Irving Street leading off it to Orange Street and Charing Cross Road. It *was* populated by restaurants mainly aimed at tourists. You can check on Google Street View if you can't visit in person. I passed through there on Saturday. Many of the restaurants have closed down. It is much the same in parts of Soho - closed restaurants. Unlike some other businesses, restaurants depend on the presence of customers. Sure, there are restaurants which do takeaways. But in the main restaurants means having customers present. Elsewhere I see that in Jermyn Street and Piccadilly there are empty shops. Perhaps they too were unviable.

    Offices whose staff work from home (where possible) realised this can be done if your staff and managers can get along and not just butt heads. This means companies can physically downsize offices. Hot desks, coming in to the office once a week or once every two weeks to 'show your face' rather than using Skype or whatever is not unreasonable. We remotely manage equipment at sites I've never been to, so working from home is not even a problem to solved for me. The knock on effect, though, is the cafes local to my office no longer see my custom. It may not be much, my £4-£7 a day, but that's £25 a week or so from one person. Multiply that by x dozen in our office, and those local cafes will suffer.

    I am not fixated on food shops or restaurants or cafes, but I'm mentioning them as I don't think the points I make with them can be contradicted.

    The commercial mortgage holders who seem intent on building high street empires are suffering, and frankly I want to see them punished - punished by losing a lot of money. They took out huge loans, based on the stupid principle that prices can only ever go up, bought some property, then hiked the rent to the tenants. Now, AC (After Covid) those tenants can't pay/won't pay/have gone away, and these mortgage holders are getting screwed. They got greedy. Note one of the points in the article about Sungard 'failing to renegotiate landlord rental rates'.

    I'm an old no-beard UNIX geezer, and I was a child in the 1970s. I clearly recall the power cuts then, and I remember seeing the uncollected rubbish in the streets. Other aspects of that time that I read about later I didn't see or wasn't aware of or didn't know about. But... London even in those troubled times seemed viable. What I have seen (and am still seeing) with these closed shops in the number 1 shopping areas is a lack of viability. The Tube was busy on Saturday, things are much like they were BC (Before Covid), but something seems to have changed. Though there are lots of people around, seemingly, the number is sufficiently less than BC to render certain businesses unviable.

    1. Tom 38 Silver badge

      Re: The general state of the economy

      The counterpoint to this is argument is that local shops are thriving in my part of East London. Since the pandemic the barber I went to near St Pauls has shut down, but there have been 3 new barbers open in our neighbourhood (none before covid). Cafes here did mad business during the pandemic, and are much busier still than pre-pandemic, and all the restaurants that shutdown during the pandemic have reopened (more accurately, mutated in to a different restaurant).

      1. Doctor Syntax Silver badge

        Re: The general state of the economy

        What is it with barbers? We now have more barbers in my neck of the woods than charity shops or estate agents - and we don't exactly have a shortage of either of those.

        1. VoiceOfTruth

          Re: The general state of the economy

          One point on the subject of barbers... last year during (one of) the lockdowns I couldn't stand it any more and cut my own hair very roughly. Meanwhile I noticed the politicians were on TV with their usual neatly trimmed hair cuts. How did they manage this?

          1. Anonymous Coward
            Anonymous Coward

            Re: The general state of the economy

            TV companies employ make-up artists, barbers, etc to make the on-screen carbon-based units look more photogenic. Do you think our politicians and TV presenters look so well groomed in real life?

        2. Starace

          Re: The general state of the economy

          The thing with barbers, and certain other sorts of businesses, is they're great if you need to do a bit of laundry for your real cash generator.

          That's one reason you see so many places of certain types pop up despite a total lack of actual demand.

          Had some locally get shut down for it so not just an urban legend.

          1. VoiceOfTruth

            Re: The general state of the economy

            Nail bars?

            1. Ian Johnston Silver badge

              Re: The general state of the economy

              Mostly staffed by slaves.

              This does not worry the young nearly as much as statues of people who invested in companies which profited from slave labour two hundred years ago. They are also perfectly happy to wear clothes and use electronic devices made by forced labour in China, and to go on holiday to Dubai.

              1. unimaginative
                Flame

                Re: The general state of the economy

                Its not just the young.

                Think of the academics at Jesus College Oxford (some might be young, but there is going to be a mix of ages). They are making a huge fuss about a statue of someone who had some investments in the slave trade, but they are quite happy for this China Centre to work with the Chinese government which is engaged in genocide and (as you point you) slavery right now.

                Then there are multiple universities (and the senior people making this decision are not young) who are very woke in stopping people saying things they disagree with but have taken money from a trust established by Max Mosley who was an actual fascist (he campaigned for his dad's Union Movement).

            2. Jellied Eel Silver badge

              Re: The general state of the economy

              Guessing those could be used as laundrys as well. Hairdressers can have huge margins though. I generally resent spending >£20 on a haircut, an ex would spend £800. At least the money mules and smurfs are well groomed I guess.

        3. Anonymous Coward
          Anonymous Coward

          Re: The general state of the economy

          What I've heard is that it's caused by the banks lending policies. Most people starting a new business will need some form of bank loan to get started but the banks take the view that a shop selling anything that can be bought online is a risk so the loans only go to places selling "services" like barbers, cafes, etc which mean other shops don't get the opportunity to get off the ground

    2. Anonymous Coward
      Anonymous Coward

      Re: The general state of the economy

      When your energy bill goes up from 100->400 a month that's quite a few coffees and lunches.

      Suddenly packed lunches and a thermos has a new appeal...

  2. Anonymous Coward
    Anonymous Coward

    Cloud Revisited

    ....MegaUpload revisited?

    Better start now RESTORING those terabytes.....or....like the restaurants in Central London.....your terabytes will be gone for good!

  3. Anonymous Coward
    Anonymous Coward

    So many people ...

    seem to be obsessed with the totally incorrect assumption that tomorrow=today+24 hours

    and then come unstuck. Mainly because a worldview like that is axiomatically "all about me" and if the past 2 years have taught us anything, it's that it most certainly is not all about me.

    For example.

    Feburary 2020: "I couldn't possibly work from home ... because"

    February 2022: "Me ? Oh I've always worked from home ..."

    Autonomous cars are also subject to this whimsy. As were driver only buses in the 70s.

    1. Anonymous Coward
      Anonymous Coward

      Re: So many people ...

      And, dependant upon age group, the past is so much more glorious that today and the future is even more scary.

      NB all generalisations do not neccesarily apply to the individual.

  4. lglethal Silver badge
    Trollface

    Sooo...

    Sungard Availability Services, soon to be Unavailable?

  5. Doctor Syntax Silver badge

    "good at what they do" but expensive in a business environment that is "trying to reduce costs."

    AFAICS the main business seems to be business continuity. That's always expensive until you need it. If you're going to save on that maybe you can save on backups. After all if you don't have anywhere to restore the backups why take them?

    However WFH is going to reduce the need for the ready to go office space they illustrate but not necessarily data centres.

  6. An_Old_Dog Bronze badge

    customer contract language

    Did the customer contracts specify X services at fixed rate Y, for time period Z, or did they allow for price hikes within the contract duration?

    If it's the former, then Sunguard messed up and is trying to screw over its customers to compensate for it.

    1. Doctor Syntax Silver badge

      Re: customer contract language

      The customers still get screwed if the service is terminated with no money for refunds.

      Reality is a bitch.

      1. I Am Spartacus

        Re: customer contract language

        Sunguard to customers: Regardless of your contract, you have to pay more because we have to pay more and we have to pass on to you these increased costs.

        Sunguard to Leaseholder: Look, we have no money so you are going to have to take a haircut.

        Do these two statements sum up their position?

        I keep saying that the cloud is just a different way of spelling "someone else's computers".

  7. HildyJ Silver badge
    Boffin

    It won't happen but ...

    I'd like to see the customers group together and buy the business out of receivership.

    It would be an opportunity for them to take control of their availability service but the beancounters would never allow it.

    1. Doctor Syntax Silver badge

      Re: It won't happen but ...

      "the beancounters would never allow it"

      Of course not. There's only budget after the event for recovery from the event, not beforehand for prevention or preparation for recovery.

    2. Anonymous Coward
      Anonymous Coward

      Re: It won't happen but ...

      I'd like to see the customers group together and buy the business out of receivership.

      Why? The people running the business (and presumably knew its ins and outs) couldn't make it work. So what hope is there a random bunch of customers with conflicting interests, differing amounts of ready cash and no clue abour running datacentres could succeed where the previous management failed? Maybe an existong DC operators willl step in, renegoitate the contracts and carry on business as usual. Or maybe not.

      When Topshop, Thomas Cook, BHS, Enron, etc went bust did customers group together and buy the business out of receivership?

  8. DaemonProcess

    high cost and accounting

    The Sunguard place near Heathrow is basically a huge American design. I can't believe they did a sale and lease-back on their own design. Given the huge amount of debt these companies happily run, they would have been better off owning it under a commercial mortgage. The building would be worth more and their balance sheet would be much better, but accounting principles....

    Also the nature of the recovery business isn't helping them - they have to own and operate old kit - many items are off mainstream support now and they are not power-efficient - e.g. small capacity spindle disk drives and old slow CPUs.

    As for barbers - the town centres have been gutted by Amazon and Ebay - only service industries such as beauty and food remain, where you have to be on premise. Ok I will make an exception for estate agents but that's only because their profit margins are obscene.

  9. Jimmy2Cows Silver badge

    Ah the stupidity of greed at any cost

    Option 1:

    Landloard negotiates manageable rent with tennant. Tennant stays in business. Landlord gets rent. Tennant's customers continue to receive their service.

    Obvious result: Tennant wins. Tennants customers win. Landlord loses a little bit.

    Option 2:

    Landlord refuses to renegotiate rent. Tennant goes under. Landlord gets no rent. Landlord will struggle to find new tennant willing to pay rent at old rate, so landlord will have to negotiate lower rent anyway. Site remains unoccupied while landlord struggles to find new tennant.

    Obvious result: Tennant loses everything. Tennant's customers lose. Landlord loses a lot more.

    Either way, landlord loses. How much is up to them, and they seem to have gone all out to maximise it. Idiots.

    1. Coastal cutie

      Re: Ah the stupidity of greed at any cost

      Exactly - in the large village where I live, a single landlord owns most of the shopping parade. When non-essential shops had to close, they did everything they could to keep the tenants afloat - rent holidays, lowering rents for a while when they did reopen, installing canopies over the pavements so queues could stay dry etc. The result is all of these shops are still thriving and not one has closed.

    2. Jimmy2Cows Silver badge

      Re: Ah the stupidity of greed at any cost

      Damn. Misspelled 'tenants' as 'tennants'. Repeatedly and consistently.

      20 lashes of the grammar stick for me.

      1. Evil Scot
        Pint

        Re: Ah the stupidity of greed at any cost

        Well at least you didn't spell it Tennent's.

        Have one on me. It is a Local Pale Ale.

      2. Anonymous Coward
        Anonymous Coward

        Re: Ah the stupidity of greed at any cost

        Why are you using the grammar stick for a spelling mistake?

    3. The Boojum

      Re: Ah the stupidity of greed at any cost

      I'm guessing it's not as simple as that. I understand that the value of a commercial property is its rental stream discounted to infinity. If the rent goes down then so does the value of the property. If the landlord is highly geared, as most are, then the value of its properties will form the collateral for further borrowing. Having its portfolio drop in value could have far worse consequences than a 'temporary' interruption in cash flow.

  10. talk_is_cheap

    The real issue is that their business model is currently dead in the water.

    They offer

    Colocation Servers - in a world where companies are moving more and more to cloud providers - why own your own kit.

    Managed Hosting Services - again just part of the offering from cloud providers.

    Workplace Recovery - WFH now offers much the same service.

    What makes it worse is that any client that really needs these types of services are the ones that also need the latest spec environments - the power density of the latest top hardware normally exceeded what even a 3-year-old data centre can provide. Over the years I've gone from an average of 1A (230w) per U (of space) for my deployments to 2A, with 3A and 4A becoming more the norm. Such jumps mean new builds or lots of redoing power and cooling in old builds while leaving a lot of space unused.

    1. cavac

      Re: The real issue is that their business model is currently dead in the water.

      In many cases, Colo makes more sense than cloud, especially regarding money.

      For one, the service provider can't blackmail me into artificial price hikes. When using a big cloud provider, the software if oftentimes designed to work against their specific API. With Colo, i don't have to do that. If they want to increase prices, i can just take my hardware, plonk it down somewhere else and i'm done.

      Also, since it's my hardware, i can buy upgrades and i pay only once - instead of monthly for the rest of the decade. I have seen stuff like getting charged 50 Euro per month for a RAM upgrade, where the hardware costs less than 300 Euros. Why would i basically want to pay for new RAM every 6 months?

      It's important to remember that colo and cloud are not only used by companies but also by individuals and open source projects. You can get decent second hand hardware quite cheap and run it for a decade and just buy cheap upgrades/replacements on Ebay when/if they are needed. And of course, you can the operating system of your choice and also run multiple virtual machines.

      My private Colo server is now 10 years old, and except for a couple of additional harddisk still runs the original hardware. I run multiple virtual machines, 24/7, sometimes pegging the CPU at 100% for hours. Doesn't matter. gets the job done without having to worry about getting a huge invoice because i "used too much CPU" or any of the isht.

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