New Study: Cost of Data Center Outages – 2016

Today’s data center and cloud ecosystem have evolved to support a growing business, a dynamic workforce and constantly changing business demands. In this challenging environment, data center administrators are tasked with delivering the IT part of business continuity. Business continuity refers to the ability to keep the business running in the wake of a disruptive event such as an earthquake or security incident. Fulfilling this mandate has typically involved the management of multiple, separate systems for disaster recovery, backup and security. As threats rise and systems grow more complex, there is an opportunity – perhaps even a requirement – to rethink the cost of data center outages.

2016 Cost of Data Center Outages Report

The stakes are certainly high.  Consider this: only 27% of companies received a passing grade for disaster readiness, according to a 2014 survey by the Disaster Recovery Preparedness Council. At the same time, increased dependency on the data center means that overall outages and downtime are growing more costly over time. Ponemon Institute and Emerson Network Power have just released the results of the latest Cost of Data Center Outages study. Previously published in 2010 and 2013, the purpose of this third study is to continue to analyze the cost behavior of unplanned data center outages. According to the new study, the average cost of a data center outage has steadily increased from $505,502 in 2010 to $740,357 today (or a 38 percent net change).

Utilizing activity-based costing, the methods of the study captured information about both direct and indirect costs, including but not limited to the following areas:

• Damage to mission-critical data
• Impact of downtime on organizational productivity
• Damages to equipment and other assets
• Cost to detect and remediate systems and core business processes
• Legal and regulatory impact, including litigation defense cost
• Lost confidence and trust among key stakeholders
• Diminishment of marketplace brand and reputation

It’s clear that as reliance on the modern data center continues to grow – there will be even more demand around infrastructure uptime. This report dives into various types of data centers, verticals and why systems actually go down.

Throughout their research of 63 data center environments, the study found that:

• The cost of downtime has increased 38 percent since the first study in 2010.
• Downtime costs for the most data center-dependent businesses are rising faster than average.
• Maximum downtime costs increased 32 percent since 2013 and 81 percent since 2010.
• Maximum downtime costs for 2016 are $2,409,991.
• UPS system failure continues to be the number one cause of unplanned data center outages, accounting for one-quarter of all such events.
• Cybercrime represents the fastest growing cause of data center outages, rising from 2 percent of outages in 2010 to 18 percent in 2013 to 22 percent in the latest study.

New technologies are impacting both the business and the data center. For example, cloud computing is in the midst of a growth spurt today. Goldman Sachs projects a 30 percent CAGR between 2013 and 2018. The Internet of Things will likely drive the next wave of growth. Specifically, IDC predicts the global IoT market will grow to $1.7 trillion in 2020 from $655.8 billion in 2014.

All of these developments mean more data flowing across the Internet and through data centers—and more opportunities for businesses to use technology to grow revenue and improve business performance. The data center will be central to leveraging those opportunities. Download this report and study today to learn more about data center outages, primary reasons for downtime, and how to make your infrastructure more resilient.