By Johna Till Johnson and Melanie Turek, Nemertes Research
April 8, 2005

In the biggest leveraged buyout of a public company since Kohlberg Kravis Roberts (KKR) bought RJR Nabisco for $25 billion in 1989, a group of investors including Silver Lake Partners, Bain Capital, The Blackstone Group, Goldman Sachs Capital Partners, KKR and others acquired SunGard (NYSE: SDS) two weeks ago in a transaction valued at approximately $11.3 billion. The deal signals a sea change in disaster-recovery and data processing strategies, and highlights several key trends -- in particular the transition from “glass-house” mainframes to distributed computing and associated technologies.

SunGard offers full-service disaster-recovery and business-continuity planning services, as well as data-processing services for large enterprises. While the company is profitable—it earned $454 million on revenue of $3.6 billion last year—the challenge faced by companies such as SunGard and its erstwhile competitor Comdisco (OTC: CDCO), which emerged from Chapter 11 in 2002 and is now distributing assets before ceasing operations, has been to adjust to an environment in which compute cycles are a commodity, yet non-mainframe infrastructure has become increasingly complex.

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