Venyu Blog

Sooner or later you and your business will be the victim of unplanned downtime. Maybe not today or tomorrow or even six months from now but the odds are not in your favor. Technology isn’t infallible and while your IT Manager understands uptime, frankly speaking your computers, drives and whatever else you house in your data center don’t have a clue about what your manager needs or expects.

So, while your mileage-may-vary when it comes to calculating the cost of downtime for your organization, industry-wide what does the cost of downtime mean? After all, especially in this context, time (really) is money.

Some perspective from a leading IT provider to calculate IT downtime intended to calculate the losses incurred from an IT outage is captured in this Information Week article. What this company found was more than $26.5 billion in revenue is lost each year from IT downtime, which translates to roughly $150,000 lost annually for each business.

Those are just the hard costs. The survey also found that IT outages are “frequent and lengthy,” and they cause substantial damage to a company’s’ “reputations, staff morale, and customer loyalty.”

Moreover, on average, the businesses surveyed said they suffered 14 hours of IT downtime per year. Half of those said IT outages damage their reputation and 18% described the impact on their reputation as “very damaging.”

Of the 200 companies surveyed, small enterprises lost, on average, more than $55,000 in revenue due to IT failures each year, while midsize companies lost more than $91,000 and large companies lost more than $1,000,000. A data center outage by itself can cost an average of $5,600 per minute.

Despite those costs and risks the survey also found that a surprising 56% of enterprises in North America and 30% in Europe don’t have a formal and comprehensive disaster recovery policy. Yet 87% of businesses indicated that failure to recover data would be damaging to the business and 23% said it would be “disastrous.”

So, in terms of uptime and how much you have to spend in order to keep up with the speed of your business how do you figure out what’s important to you? What you take into account, of course, depends on your business model and the mission-critical nature of the data you store and protect.

Writing in Data Center Journal Jeffrey Clark offers up a list of considerations that are largely globally applicable to all data centers in trying to calculate downtime. These include:

Basic employee costs. If your employees require data center uptime to do their work, then each second of downtime incurs a cost penalty equal to the cost of each employee for that amount of time. Because your employees are unable to work, you are essentially giving them money for nothing (although some work may continue—this is usually not an “all or nothing” situation). Don’t forget to include the cost of benefits in addition to salary—you are paying for these things whether your data center is available or not. The question is whether your employees are actually working for the money you’re paying them.

Facility costs. Even if your data center is down, leaving your employees unable to work, you must still pay for much or all of the infrastructure costs associated with those employees. For instance, you may have to continue to air condition the building, pay for lighting and other utility expenses and still (of course) make payments on the facility. Again, the question is whether you are receiving any value from your employees in return for these payments.
Business losses. If you rely on your website to conduct business with your customers, for example, then downtime means that those customers cannot purchase your goods or services. Indeed, they may wait a day or two and come back to make the same purchases they would otherwise have made, but on the other hand, they may simply go to someone else who has a working website. So, chances are you’re losing business, and that’s costing you money.
Data losses. Downtime may mean more than just idle time for your employees; in some cases, it can mean that valuable data is lost—maybe permanently. The value of such data is the amount of time and money you invested in its collection or development, and this value is increased if it must be maintained or delivered on a schedule. (For instance, if a client requires a design by a certain deadline, then losing it may cause you to lose the time and money you spent on it as well as present or future business from clients that have strict schedules.)
Recovery costs. Once your data center is back online, the losses may continue to mount. For instance, if your facilities personnel must continue to make repairs or do other work associated with the failure, then you’re losing even more money, because these personnel could have been doing other tasks had there been no incident.

I’d add one more that takes all of these factors into account: partnering with Venyu in protecting data from downtime ensures your peace-of-mind that if your data center does go down, your business doesn’t go down with it.