Within the Cloud: Technical Concepts of Cloud Computing - Deploying and Managing a Cloud Infrastructure - page 73

The same study showed that 62 percent of senior-level respondents believed that
unplanned outages happened only sparingly, while 41 percent of the rank and file agreed.
This means that most IT staff members know that unplanned outages are happening fre-
quently, even though they might not be severe and total ones. This data shows that C-level
executives understand the economic importance of their company's data center operations,
which is not surprising given that it is their core responsibility to understand all the resources
and economic facets of their organization and put them to good use. However, it also indi-
cates that these same executives are not as aware of the day-to-day operations of the data
centers compared to those that are assigned with maintaining the organization's IT infra-
structure. And as such, they are not aware of the frequency of downtime and other vulner-
abilities of their IT infrastructure that may be contributing to these events. And because the
rank-and-file IT staff may be unaware of the huge role of the data center in contributing to
the organization's economic standing, they would probably not be proactive enough to report
and recommend improvements in the infrastructure.
Downtime has associated costs no matter how short. They don't happen because some-
one just flipped the off switch for a second or two. A downtime always has a cause, and
more often than not, this cause is a hole that needs to be patched up, which translates to
spending money.
Quantifying Downtime Costs
According to the study, the average cost of downtime is $5,600 per minute, and based
on an average reported downtime length of 90 minutes, the total is a whopping cost of
$505,500 per downtime event. The calculated costs are a combination of many factors:
■ Corruption and data loss
■ Equipment damage
■ Productivity loss
■ Root-cause identification and recovery
■ Legal repercussions
■ Revenue loss dues to failed transactions
■ Even long-term effects on reputation
Direct costs accounted for only about a third of the perceived costs; indirect costs and
opportunity loss make up 62 percent of the reported costs. What's surprising is that about
only $9,000 is attributed to equipment costs per downtime event, which means that intan-
gible costs down the road far outweighs the cost of maintenance after a downtime event.
A typical data center in the United States experiences an average of two downtime
events over the course of two years. So the costs incurred by downtime events can easily
go beyond $1 million in less than two years. These downtime events are not even limited to
total outages but include low-level factors and per-rack outages. For enterprises that depend
solely on their data centers to deliver IT and networking services for revenue, like cloud
service providers, telecommunications providers, and e-commerce organizations, the cost
of a single downtime event can be more costly. The study showed it to be over $1 million