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DIY Downtime Calculator: Costs Are Higher Than You Think

Rob RaeThere’s a common theme in disaster recovery: Headlines discuss mega winter storms and the approaching hurricane season, and business leaders have a tendency to think they’re safe from data disasters if they’re located in more temperate regions. While they’re correct that they don’t have the same disaster -ecovery concerns as companies located in hazard-prone areas, the reality is that most data disasters aren’t weather related. In fact, disasters come in all shapes and forms and from any number of sources, including (especially) internal problems. A virus woven into a software download, a server failure, a hack on the computer used to access a network remotely … and the list goes on from there.

The cost of a few hours of downtime, never mind days or weeks, can be devastating for a business. Customers can’t make purchases or access account information. Partners can’t log into their accounts. Employees can’t work. The lost revenue adds up quickly. There was a time when taking days or weeks to recover didn’t have the lasting impact it does now. Tape backups that required physical transportation were reliable enough for the time. But businesses can’t wait weeks or even days to get moving again in today’s 24×7 world. Downtime for any amount of time is no longer acceptable. The solutions to eliminate downtime exist, and companies that don’t make their implementation a priority are just asking for trouble.

So how do you make that point? By helping customers calculate the real business cost of downtime.

Back Up the Stats

Reports related to the true cost of downtime and data loss vary in terms of dollar amounts. The Ponemon Institute pegged the cost of a data breach at $3.79 million. We’ve also examined losses due to manmade incidents and found that some SaaS apps, such as Office 365, have the potential to lose more than $800 worth of data per user, per domain. Either way, these are figures no company can really afford. Think about the number of employees affected by a disaster, their wages, the associated overhead costs and the revenue lost because of the disaster and keep adding it all up for every hour of downtime.

Quick calculations for downtime cost:

RECOVERY PROCESS START TIME + LOCAL RECOVERY TIME = DOWNTIME

(EMPLOYEES * WAGE) + (OVERHEAD + LOST REVENUE) = COST OF DOWNTIME

DOWNTIME x COST OF DOWNTIME = TOTAL COST TO BUSINESS

Example metrics:

  • Recovery process start time: 1 hour
  • Local recovery time: 100GB / Local speed = 819200Mb / 700Mbps* = 1170 seconds
  • Employees Affected: 10
  • Average Wage: $25/hour
  • Overhead Costs: $100/hour
  • Revenue Lost: $250/hour
  • *Example average local speed
  • 1 hour + 1170 seconds = 1.33 hours = DOWNTIME
  • (10 employees * $25/hour) + ($100/hour + $250/hour) = $600/hour = COST OF DOWNTIME
  • 1.33 hours * $600/hour = $798 = TOTAL COST TO BUSINESS

Even with formulas designed to determine the precise costs of these events, the negative impact on company reputation and lost business in both the short and long terms are unquantifiable.

And, manual backups and outdated technology won’t help continuity. Solutions designed 40 years ago were created to solve the problems of 40 years ago. Backup tools that add more work for employees aren’t likely to function optimally. People make mistakes. The threat landscape businesses face has evolved dramatically.

Customers that cling to outdated or manually driven backup processes may achieve the goal of backing up their data in one sense, but they can’t guarantee its availability when needed, nor can they be sure the process worked exactly as it was supposed to. Business continuity cannot be guaranteed with backups that are dependent on employees remembering to copy data at the end of the week. That means automation. In particular, hybrid cloud backup promotes continuity.

The most cost-effective solution for companies looking to back up critical workloads is in the cloud. Resistance to cloud over reliability issues made sense some time ago. Now, it’s just holding organizations back. Hybrid cloud-based backup solutions give companies access to a local backup stored onsite and an additional copy of their entire network stored in the cloud. The local backup enables quick access to data when necessary. Meanwhile, the cloud keeps another copy available to fail over the second a larger-scale issue occurs and gives companies the ability to avoid extended downtime. Hybrid cloud backup gives organizations the security they need to quickly get back up and running for both small and major data disasters.

No company is immune to data disaster. It’s clear that the revenue lost when a problem leads to extended downtime is far too substantial to let it become a possibility. Moreover, outdated technology is not the answer. Companies that want security for the growing list of threats need to consider what they stand to lose, as well the solutions designed to minimize downtime entirely.

Rob Rae is vice president of business development at Datto, where he leads efforts to help the company’s channel partners grow their businesses. He also oversees Partner Development, Partner Programs, Training, and the annual Datto Partner Conference. With more than 25 years of channel sales and B2B activities, Rae has extensive experience in IT hardware and software sales with value-added resellers, managed service providers and other channel-focused organizations.


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