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.

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