Enterprising Developments

What it Costs When a Data Center Goes Down

Joe McKendrick
Insurance Experts' Forum, November 18, 2013

Nobody argues that it's a bad thing when a data center or system goes offline. Now, VirtualHosting has attached some numbers to the costs and implications of downtime.

A handy infographic the hosting service assembled notes that there are at least 500,000 data centers in the world. In total, they take up about 286 billion square feet, or 100 Empire State Buildings put together.

The hourly loss for a data center outage is as follows:

- $101,600 an hour among “best in class” companies;

- $187,700 an hour as the average; and

- $99,150 an hour for laggards.

You may wonder why laggards get such a price break for their outages, especially since they likely do not put as much money or work into keeping things running as they should. It may boil down to complexity – the best-in-class companies, as well as many “average” data sites – likely have businesses relying on a range of services. The laggards may not even offer as many services.

In fact, it is reported that 59 percent of the Fortune 500 – who presumably invest gobs of money in their data centers – still have at least 1.6 hours of downtime per week in their data centers. That translates to $8.5 million a year in losses, if they are “best in class.”

One out of 10 companies say they need to be up and running always, without even a hiccup – requiring greater than 99.999 percent availability, considered the gold standard in data center uptime.

The biggest reason for downtime in data centers? It's not natural disasters, it's not cyber-terrorism – believe it or not, it's squirrels. These small critters account for 17 percent of all data center outages, mainly by chewing through cables.

Risk underwriters have seen it all, and maybe wouldn't be surprised to see who is behind a lot of this damage. It's a nutty reason to lose your connections when you need them.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

A Cure for Analysis Paralysis

“Adaptive” analytics can help insurers keep up with the flood of real-time data.

To Quantify or Not — That is the Question with Modernization (Part II)

While the quantitative business case may be ingrained in many insurance operations, it often offers little practical use.

The Good, The Bad and The Ugly Of Enterprise BI

When IT can't deliver, business users build their own applications focusing on agility, flexibility and reaction times.

The IT-Savvy 10%

IBM survey reveals best practices of IT leaders.

The Software-Defined Health Insurer: Radical But Realistic?

Can a tech startup digitally assemble the pieces of a comprehensive, employer-provided health plan?

Data Governance in Insurance Carriers

As the insurance industry moves into a more data-centric world, data governance becomes more critical for ensuring the data is consistent, reliable and usable for analysis.