The Data Center in Your Closet: How Risks of Power Loss Impact Business Operations

All companies, regardless of size, rely on power to run their business-critical operations. As a result, data center availability has evolved into a top requirement.  Any amount of downtime can be devastating for emerging and medium-sized businesses (EMBs).

Just one short downtime event can impact everything from revenues, profitability, reputation, to even a business’ viability.  However, many company executives and IT professionals don’t truly understand how their current infrastructure may be putting the business at risk, as well as the ramifications and associated costs of a power loss.

Downtime Misconceptions Abound Among Internal Staff

Ponemon Institute, an independent research firm focused on privacy, data protection and information security issues, conducted a study involving more than 400 data center professionals.  Relative to downtime impact, survey results found some troubling misconceptions among the study’s respondents.

For example, participants indicated their company experienced an average of two downtime events within a two-year period.  On average, each downtime period lasted 120 minutes.  Yet, a disconnect between reality and perception seems to exist. An astonishing 62% of C-level respondents said unplanned outages didn’t happen frequently versus 41% of IT staff.

Another surprising finding in this study involves the use of best practices.  Of those responding, less than 32% believed their company employs best practices to maximize availability.  In addition, 71% of senior-level respondents compared to 58% of IT staff acknowledge the company’s dependence on data center performance to generate revenue.

These findings create a dilemma for many companies, especially EMBs.  Senior executives acknowledge the critical role data center operations play in fulfilling the company’s goals.  However, many execs don’t realize how much downtime their company is actually experiencing, nor the real impact it’s having on the business.  And, a fairly high percentage of internal staff is doing little in terms of developing best practices to circumvent downtime.

Factors Contributing to Downtime Risk

The common misconceptions among senior executives and IT staff can contribute to costly downtime.  Therefore, the first order for any business is to fully understand the current state of affairs concerning systems availability.

How many downtime events has the business really experienced in the past couple of years?  What was the average downtime of these events? Can failures be attributed to equipment issues, operating procedures, security breaches, unplanned disasters or a combination of these things?  What best practices can the company develop to boost availability?  With the answers to these questions, EMBs can begin to develop a better data center strategy.

To provide a foundation for improved availability, companies must invest in the most advanced infrastructure technologies.  However, from a time, expertise and budget standpoint, maintaining leading edge technology proves challenging for even the largest enterprises.  EMBs find it especially difficult to keep up on the latest technological advances to minimize downtime.

Also, having in-house staff with the required operational, facility management and security expertise proves difficult for most EMBs.  These experts can develop the necessary best practices to enhance infrastructure availability.  Unfortunately, these resources are expensive and can be hard to find.

How Downtime Cripples EMBs

Over the past decade, data center systems have played a critical role in generating revenue and growing a business.  With all the company operations dependent on power, any downtime can be devastating.  In fact, just a few minutes of downtime can harm an EMB more than most company executives even imagine.

For example the Ponemon Institute study found, on average, downtime costs businesses thousands of dollars per minute.  And, the average cost of a single downtime event was approximately $500,000. Once EMB executives think about all the required activities dependent on power, the huge costs become more apparent.

Here’s a list of some of the ways a power outage will detrimentally affect operations and increase costs dramatically:

  • eMail – For years, email has been a productivity enhancer.  However, during power outages, Internet access and the applications dependent on it become unavailable.
  • Phones – Most businesses are dead in the water without phone communication.  Yet, when the power goes out, so does the phone system.  The whole business becomes incommunicado.
  • Order Processing – If phone and email communication is unavailable, order processing comes to a grinding halt.  Will customers simply be frustrated by a company’s lack of availability?  Or, will they place their order with a competitor instead?
  • Mission-Critical Applications – If there’s no power, there’s no access to applications used to run the business.  Today, companies depend on certain software applications to operate every aspect of the business. Without access to ERP systems and other mission-critical applications, the company ceases to function.
  • Data Loss or Corruption – Data is the lifeblood of any organization.  Whether it’s a customer database, financial records or a list of sales prospects, any loss can devastate business operations.  Protecting data against security breaches and unplanned outages requires sound disaster recovery strategies.
  • Equipment Damage – Whether faulty equipment caused an outage or an outage damaged the equipment, companies will incur a substantial expense for the replacements.
  • Legal Ramifications – Depending on the industry, some companies may be faced with legal consequences for downtime.  Regulatory fines can add significantly to the overall cost of a power outage.
  • Company Reputation – If customers can’t get through to a business, they become frustrated and question whether the company “has its act together.”  Downtime can cause companies to re-evaluate the relationship and possibly look at competitive offerings.

Fortifying an Infrastructure through Colocation

The in-house data center situation for many EMBs has created numerous difficulties.  The lack of understanding regarding downtime frequency and consequences results in serious business vulnerabilities.  In addition, inadequate technology and staffing expertise adds fuel to the fire.

However, colocation provides a viable solution for EMBs in this situation.  It can provide a speedy ROI on IT infrastructure investments while providing added protection from downtime.  Because it’s their core business, experienced colocation providers:

  • Make regular investments in advanced technologies
  • Have infrastructure and security experts available 24/7 to monitor and manage data center operations
  • Incorporate appropriate levels of redundancy to ensure 100% availability
  • Offer disaster recovery solutions for unplanned events
  • Construct physical facilities to the highest operating standards
  • Develop operational procedures to ensure an always-on environment

As outlined above, just one downtime event can impact a business’ profitability in a huge way.  If EMBs operate inadequate data centers, they risk recurring downtime.  And, these downtime events can result in massive financial and productivity losses, as well as damage to a company’s reputation.

For more information on colocation services, visit http://www.cyrusone.com.