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July 16, 2010
By Ritchie Fiddes, Sales Director at Backup-Technology

Backup-Technology Online Data Backuyp Expert Tips: Uncovering and Calculating the Hidden Costs of Downtime

What is downtime? Downtime is the time that is lost when your computing systems do not work for any reason. The cause could be as simple as power outage or as complicated as a Tsunami, which washed away your data center. Customers trying to reach you, will find that you are unavailable online and offline you are unable to service them because you do not have the customer data or your product data before you!

Therefore, downtime has several business implications. At the least, it can be cost of restoring the system, but can also include loss of goodwill, loss of first time customers and loss of information that could have helped the enterprise in future sales or the expansion of customer base.

You can calculate the cost of downtime on your customer base using the following formula:

(% of users affected) x (average salary in minutes (can be calculated by -> yearly salary/124,800 minutes/ year)) x (burden rate) x (total minutes of downtime for the year) = cost in minutes of lost personnel productivity.

Once you have arrived at the above figure, you will need to add to it the cost of outages and other kinds of costs that you can reasonably estimate on the basis of industry standards. It is estimated that a 0-2 hours of outage means a 2 percent loss of business.

Research indicates that businesses underestimate the loss due to downtime by 1000%.  There are several other costs that are often overlooked when estimating the cost of downtime. These include the cost of startup. Startup costs may include costs of energy surge, materials, manpower, and units per hour lost. Add to this, costs of inspection and rework costs. Further additions would include costs that may arise from patchwork attempts to put the system together. [The patchwork often comes undone later and will have cost implications of its own].  Cost of shipping tapes and disk drives for restoration of data may also need to be included in the cost of downtime.

What is the solution?  While no single solution will address all possible causes of downtime, separate and logically integrated solution for handling downtime cost can be found.

One possible solution for guarding against downtime of your computer systems is to ensure that you have “hot sites” or alternate data centers that can take over the functions of your primary data center in the event of your primary center going down for any reason. You can create hot sites by setting up your own data centers in geographically remote locations and maintaining a duplicate set of manpower to maintain such systems and ensure that data is being continuously replicated from the primary system.

Alternately, you can outsource the maintenance of your hot site to online backup service providers whose primary business is the maintenance of data repositories and hot sites. The systems can then be structured in such a manner that the hot site takes over business operations and access to data seamlessly, the moment the primary data center goes down.

Customers visiting your website or your showroom will never be subject to or even aware of the downtime that you are experiencing at your primary data center. Your employees can continue to work by accessing the data stored in the servers of your online backup service provider with little or no awareness that they are accessing a system other than the one they are normally used to accessing.

Business continuity is ensured while you attend to the specific problems in your primary data center and bring it online by reverse replication of your data from your online data repository to your primary data center. You will have no loss of goodwill, first time customers or even loss of information at your front office.

About the author: Ritchie Fiddes is Sales Director at Backup Technology. Try Backup-Technology’s free online backup for WordPress

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