The Real Cost of Outages

Posted on March 18, 2016 by Mark Sullivan

We’ve discussed in this space the need for companies to understand what their vendor offers in terms of uptime – and why this is so critical to being successful with your data center partner. Organizations today simply rely on their data and information being available 24/7/365 to operate. Without a guarantee of continued availability, it becomes impossible to be successful. It’s not too much of a stretch to imagine the consequences if an emergency room were unable to access patient data, even for a couple of hours.

This past week we saw an article about some research that really hammers this point home: the Ponemon Institute and Emerson Network Power issued a report entitled “2016 Cost of Data Center Outages,” which highlighted several points about the damage that unplanned outages can do. Here are some of the highlights:

  • The average cost of a data center outage has risen to $740,357, up from $690,204 in 2013; this breaks down to the average cost per minute of an unplanned outage being $8,851, up from $7,908 in 2013.
  • The average unplanned outage among the respondents lasts 130 minutes, up from 119 minutes in 2013.
  • Business disruption accounts for $256,000 of the cost of a data center outage, up from $238,700 in 2013.
  • Lost revenue represents $208,600 of the cost of a data center outage, up from $183,700 in 2013.
  • Impact on end-user productivity accounts for $138,200 of the cost of a data center outage, which is down slightly from $140,500 in 2013.
  • The industries with the highest cost per outage are: Financial Services: $994,000, Communications: $970,000, Health Care: $918,000, e-Commerce: $909,000.

Any single one of those bullets – from user productivity to business disruption – would be enough reason to invest in ensuring your data center remained up and running at all times. A long outage can doom your organization.

You must proactively take steps to ensure that your data center partner can handle the needs of your business and keep you up and running. As you evaluate data center partners, keep in mind the following when discussing how they can keep your organization up and running:

  1. Employees and customers alike expect that everything is on, all the time, without delay. You now understand the damage an outage can do – but pay close attention to your partner’s response when you discuss uptime. Are they confident in their abilities? Do they clearly discuss their outage history (if any) and give examples of what they’d do to keep you running? Do they discuss redundancy and recovery plans? Or, do they immediately say: “no one can prevent all outages.” Their answers will be telling to you.
  1. How are they staffed? Are they monitoring things 24/7/365? How quickly can you get in touch with someone if there’s a problem?
  1. How is their ability to grow? Most companies are created to become successful and continue growing, both with new employees and new customers. Can they handle your success? Do they have the ability to grow with you? Or will you find yourself repeating the selection process if you become a bigger company?

Here at the Markley Group, we’ve always been dedicated to helping our clients stay connected all the time. To learn more about how our colocation and cloud computing services can support your company’s present and future, contact us here: sales@markleycloud.com.