Datacenter Dependence Makes Downtime Costs Skyrocket

Datacenter downtime costs rise most quickly in business-related functional areas

Nothing demonstrates organizations’ increasing dependence on datacenters – both internal and cloud services – more than the cost of doing without one that goes offline unexpectedly.

The cost of a single minute of unplanned, complete outage of a production datacenter rose 41 percent during the past three years, from $5,600 per minute in 2010 to $7,900 per minute in 2013, according to a survey of 450 datacenter employees published Dec. 4 by the Ponemon Institute and Emerson Network Power.

That increase suggests datacenter-based computing resources have become far more valuable far more quickly than expected, even given other analyst reports showing increasing dependence on data or applications based in the cloud, according to Larry Ponemon, founder of Ponemon Institute.

The most telling statistic is how organizations accounted for costs.

Losses in IT Productivity, Recovery, Equipment Repair/Replacement and other direct costs increased far more slowly than more subjective measures; the amount of revenue lost to datacenter downtime rose 56 percent between 2010 and 2013, according to the report. (download PDF here.) End-user productivity lost due to downtime increased 46 percent, though IT Productivity costs rose only 26 percent.

Damage to a company’s reputation, lost business or lost customers and other elements classified as Business Disruption remain the single highest-cost category, averaging a cost of $238,717per incident, but was also one of the fastest-growing, at 33 percent between 2010 and 2013.

Part of those estimated increases come from increased sensitivity and awareness of the increasing dependence of organizations on their datacenters, Ponemon said: “The expectation that uptime is now a baseline assumption and there is an urgency to deliver it in order to save on costs reverberates through the findings of this study.”

Even so, industries that depend most heavily on data and processing still incur the highest costs.

Telecom (average cost-per-outage of $976,344) and e-commerce companies (average cost-per-outage of $844,787), whose business depends entirely on their ability to deliver services housed in datacenters, counted the highest costs. Defense contractors ($812,269/outage) and financial-services businesses ($773,286/outage)– which depend on high levels of expensive security for the data they store and use – also fell into the upper range.

The fastest increases came in industries that have evolved rapidly to depend far more heavily on datacenters now than they did three years ago, however, according to Ponemon.

The cost of downtime in the hotels- and hospitality industry ($392,922/outage) rose 29 percent, for example, while costs in the public sector ($531,086/outage) rose 16 percent.

“This increase in cost underscores the importance for organizations to make it a priority to minimize the risk of downtime that can potentially cost thousands of dollars per minute,” Ponemon said.

 

Image: Ponemon Institute

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