In an all-digital world, the data center is the backbone. Calculating downtime costs can give you visibility into what you can do to prevent it. In this article post, we will explain how important it is to know the Cost of downtime because no one is immune to downtime.
Calculating Downtime Cost for Better Mitigation
As data centers continue to grow and become more complex, the chances of downtime increase. Understanding the factors that cause downtime and how much it can cost is essential. Some factors that cause downtime are physical damage, power loss, and software failure.
Nowadays, it is common practice to calculate downtime costs to understand better the impact that downtime can have on a company's bottom line. These costs can be estimated based on the time the data centers are down and the money they make while they are up. This way, you will know what your company is losing during downtime. Data center operators have found that it is beneficial to calculate the actual Cost of downtime rather than just looking at the monetary value that comes from being up and running.
Number of hours per day x Number of days per year = total Number of hours each year that the data center is operating for
Total Number of hours operating each year x average hourly rate = total cost per year for every hour that data center is operating
Total Cost per year for every hour operating x Number of minutes without power = Cost for every minute without power
Cost for every minute without power x Number of minutes with power.
How you calculate downtime can make a big difference.
Various Downtime Factors
One of the biggest challenges facing data center technology today is the increasing importance of downtime costs. It has become more critical than ever to calculate downtime cost because many different factors affect the Cost of downtime, including:
Costs of lost business revenue during downtime.
Costs of delayed shipments or lost orders during downtime.
Costs of data restoration from backup tapes or other media.
Costs of third-party support services during downtime.
Costs of employee overtime wages during downtime.
Operational costs for impacted IT staff and equipment.
Repair and replacement costs for impacted IT equipment.
The main problem with calculating downtime cost is that most enterprise architects need to pay more attention to it. The reason is that they're only focused on increasing productivity and minimizing costs while designing their business' IT infrastructure. However, considering downtime costs could lead to wasted investments in technology that will only be functional when needed.
Reducing data center downtime can save millions for organizations.
The Cost of downtime can be significant for organizations. Failing to prepare for downtime adequately can result in millions of dollars in lost revenue, brand damage, and operational costs. To better understand the Cost of downtime, you must first understand how your organization defines it.
The Cost of a data center downtime can be relatively high, even if you only have to meet your organization's recovery time objectives. For example, according to Gartner, the average Cost of an unplanned data center outage in 2023 was $2.7 million per hour.
A data center infrastructure failure can significantly impact your business operations; thus, it is essential to ensure that you are doing everything possible to prevent such outages. At the same time, you have to weigh the costs of avoiding outages against the savings you might get from having higher uptime rates.
But it's not just the cost of repairing and replacing hardware that organizations must worry about when facing downtime in their data centers. In addition to these immediate costs, organizations also have to consider the indirect costs associated with downtime.
Read more about Data Center Failure Can Cause Huge Costs to Business
Conclusion
In the past, it was enough to have basic up-time monitoring systems. However, as technology has advanced, so has the demand for more excellent uptime and availability. Companies are now beginning to understand how much downtime costs them—and it isn't just a matter of high-tech gadgetry but good old-fashioned math.
According to a study by Gartner, downtime costs are "the effect on revenue or other organizational performance caused by an interruption in service." This can include lost revenue due to customers needing help doing business with you, marketing expenses that your company runs up to acquire new customers during the outage, and penalties or fees incurred because of missed contractual commitments.
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