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23.09.2016

Do you know the real cost of a data centre outage?

Data centres are essential to enabling businesses. According to research from IDC, the amount of data being produced doubles every two years. This presents more opportunities for businesses to use technology to grow revenue and improve business performance, and central to leveraging those opportunities is the data centre. However, increasing volumes of data are also putting data centre infrastructures under greater pressure.

Alarming data from a survey of over 2,400 IT professionals by security vendor Symantec, indicates that in the past 12 months, data centres across the globe have experienced an average of 16 outages per site, with the most common causes cited as systems failures, human errors and natural disasters. We all know that’s going to cost, but are you aware of the full extent of the financial implications that data centre downtime incurs?

Understanding the total cost of downtime

When your data centre experiences an outage, there are three types of costs you are subject to:

1) Direct cost: the actual expense outlay to accomplish a given activity.

2) Indirect cost: the amount of time, effort and other resources that are spent.

3) Opportunity cost: the resulting cost of lost business opportunities and reputational damage.

Bar Chart 1: Percentage cost structure of unplanned data center outage. Source: Ponemon Cost of Data Center Outages

These are reflected in a variety of cost consequences, which include:

– Detection cost: initial discovery and subsequent investigation of the outage.

– Containment cost: preventing an outage from spreading or causing greater disruption.

– Recovery cost: getting your networks and core systems back to a state of readiness.

– Ex-post response cost: after-the-fact incidental costs.

– Equipment cost: for new equipment purchases, repairs and refurbishment.

– IT productivity loss: lost time and related expenses associated with IT personnel downtime.

– User productivity loss: lost time and related expenses associated with end-user downtime.

– Third-party cost: for contractors, consultants and specialists engaged to resolve the outage.

– Lost revenue: customers’ inability to access core systems during the outage period.

– Business disruption: reputational damage, customer churn and lost business opportunities.

According to research from the Ponemon Institute, in its third “Cost of Data Center Outages” report, the total cost of downtime has continued to rise over the last six years. Since 2010, on average the cost of downtime has risen 38% to $740,357 per incident, which is equal to nearly $9,000 per minute (ranging from $926 – $17,244 per minute).

When you break this down, direct costs account for 36%, indirect costs for 51% and opportunity costs for 12%, with the majority of costs deriving from business disruption ($16,125,669 per incident), lost revenue ($13,141,737 per incident) and end-user productivity ($8,706,159 per incident).

Just take a second to consider the implications for your business. If you experienced 16 data centre outages a year, each costing an average of $740,357, that’s over $11.8 million.

The root cause of downtime

So why do unplanned outages occur? There are many things that would cause your data centre to incur downtime, but according to the Ponemon Institute, the top three reasons are:

– UPS system failure: accounting for 25% of incidents and costing $709 per incident.

– Cyber crime (DDoS): accounting for 22% of incidents and costing $981 per incident.

– Accidental/human error: accounting for 22% of incidents and costing $489 per incident.

While you’re able to anticipate and plan for some of these, others are out of your control and harder to predict. For example, weather-related incidents account for 10% of data centre outages, costing an average of $455 per incident.

And don’t be fooled into thinking that you’re ok as long as it’s a total outage; partial unplanned outages can be just as damaging and costly to your business. Although they last on average 66 minutes less than complete outages, partial outages will still end up costing you a massive $499,800 per incident (compared to $946,788 for a total outage).

It would be understandable for you to underestimate the total cost of downtime, but the evidence is clear – the potential impact could have devastating or fatal consequences for your organisation. So what can you do to ensure your data centre is protected, and your operations future-proofed?

Future-tech: effective data centre design

If you’re unsure whether your facility has been designed by an architect or engineer with in-depth knowledge in data centre design, a design review by an industry specialist is essential. The design review will evaluate whether a best-practice approach has been taken, risk minimised and expected standards of quality and performance have been met.

We have been at the forefront of innovative data centre design, build and management for over 30 years. During this time, we have conducted data centre peer reviews for a wide range of clients, and are respected throughout the industry for our independent, fair and sensitive approach to the peer review process. Engaging with our specialist data centre design consultants and engineers will always add value to your project. Our experts will work in partnership with you and your team to ensure the facility is capable of fulfilling your IT requirements, is designed for maximum efficiency and that all potential scenarios are accounted for.

Our commitment to innovation means we continually push the boundaries of energy efficiency, scalability and optimisation in the data centre, and because we only work with data centres, our highly skilled, highly experienced in-house team have enviable expertise, which translates into highly efficient designs, low build times, reduced costs and future-proofed data centres.

Discover how our data centre design helps protect you against the increasing cost of downtime.

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