Not long ago, the average person rarely interacted directly with information technology. Computers performed large-scale data crunching, but somebody hidden away in a back office managed the systems.
Those days are gone.
Today, people don't just use systems; they utterly depend on them. Even when system interaction is not direct, such as when you call a company for service, there is typically no more than one degree of separation between you and the system. Moreover, thanks to market globalization, extended customer- service initiatives, ATMs and the Web, online systems are not restricted to nine-to-five hours. Data and applications must now be available 24x7.
This heightened system dependence has transformed the economics of data and application availability. Notably, downtime costs are now astronomical, ranging up to an estimated $6.5 million per hour for large financial brokerages and $2.6 million per hour for credit-card sales authorization services.1
According to Gartner, industry norms suggest that 99 percent service availability, defined as up to 43 hours of unplanned downtime and 50 hours of planned downtime per year, is "very good." For a company facing hourly downtime costs of $6.5 million, just 20 business hours of downtime less than half of the unplanned downtime in a 99 percent available operation amounts to $130 million annually.
Even for a smaller organization with less-vulnerable operations and downtime costs of only $100,000 per hour, 20 downtime hours still equate to a $2 million annual expense. At that same $100,000 level, in a 24x7 company where all 93 hours of planned and unplanned downtime affect operations, the annual cost would be $9.3 million.
These costs may seem implausibly high because most downtime expenses are not obvious. The first cost that most people think of is lost revenue. If a business cannot process orders, its sales will decline a threat that is amplified when business moves online. Worse, in addition to losing current sales, frustrated customers may never return, resulting in lost future sales as well.
Lost revenue is only the tip of the iceberg. Unavailable systems invariably idle some employees and reduce the value of the work of others. Recovery costs are another factor. After a downtime event, in addition to their normal workloads, employees must recover what was lost, which often involves additional hours at overtime rates.
All companies must bear lost revenue, productivity and recovery expenses when plagued by system downtime, but you may also incur a host of other costs depending on the nature of your business. Consider the following:
- Late deliveries to customers may trigger contract penalty clauses.
- Missed financial filings may result in regulatory penalties.
- If significant system unavailability results in a large drop in share price, shareholders may initiate a class-action suit if they believe that management and the board were negligent in protecting vital assets.
- If two companies enter into a formal business partnership in which one's ability to conduct business is dependent on the availability of the other's systems, then the first company may be liable to the second for profits lost during a significant downtime event.
- If the lack of system availability results in the shipment of defective products, the company may incur product-liability costs.
- Perishable-goods producers may have to dispose of spoiled inventory.
- There may be setup costs to restart a stopped assembly line.
- If frustrated employees quit, hiring and training costs will increase.
- Repeated downtime may drastically hurt a company's image, impairing consumer confidence in a particular brand. An expensive corporate image and marketing campaign may be necessary to limit the damage.
Faced with these enormous downtime threats, enterprises clearly need to act. Managed availability is an increasingly vital discipline that is helping organizations meet their availability objectives cost-effectively and successfully.
A Rational Approach to Availability
Managed availability is a rational and disciplined methodology that encompasses an end-to-end view of a computing environment including applications, data, servers, operating systems, processes and infrastructure to guarantee consistent, predictable access to any data or any applications wherever, whenever and however users require them.
Managed availability does not focus just on reliability (the frequency of hardware failures), high availability (the ability to keep operating despite unexpected events such as system crashes or natural disasters) or continuous operations (the ability to operate 24x7, regardless of the inherent need for system maintenance). Instead, managed availability takes a holistic view of your enterprise's complete availability needs so that comprehensive and practical solutions can be designed and implemented.
Figure 1: Availability Dependencies
The managed availability methodology begins with a thorough investigation of underlying economics. Performing this step gives you a better understanding of the potential benefits to be derived from managed availability solutions and helps you cost justify their implementation.
The next step is to identify the vulnerabilities that your systems face. Questions you need to answer include: Where could failures occur? How would these unplanned events impact the availability of your organization's data and applications?
It is also very important to recognize that the biggest threats to business continuity may not come from unplanned events, but rather from planned maintenance. Hardware and software occasionally must be upgraded. Databases must regularly be saved and reorganized. As databases and applications grow larger, these tasks take longer while, at the same time, the trend toward 24x7 operations shrinks the windows available to perform them.
Because unplanned downtime cannot, by definition, be scheduled during "off hours," it usually exacts a far greater cost per hour than does planned maintenance. However, because hardware failures, natural disasters and other unplanned downtime events are rare, their total cost per year may average significantly less than the cost imposed by planned downtime.
What's the Best Solution?
After gaining a thorough understanding of the economics of availability and the exposures with which you must deal, you will then be ready to begin to shore up your availability defenses.
Possible solutions are as varied as the threats they are meant to counter. Performing regular database saves provides a minimum level of data protection, leaving new data received between saves at risk. Journaling can reduce this risk, but only if the disaster that destroys the database doesn't also destroy the journal file. Optimal data protection can be achieved by replicating data to one or more geographically distant locations in real time or near real time, thus virtually eliminating all potential data losses.
Threats to application availability can be dealt with by maintaining replicas of both data and applications on geographically dispersed systems. For optimal protection, these replicas should be synchronized in real time on a hot-backup system. Software can then monitor the availability of the primary system and quickly switch users to the backup system when necessary.
Uninterruptible power supplies (UPSs) can reduce the threat of electrical outages. By combining UPSs with backup generators, you can almost eliminate the risk.
Space does not permit a full enumeration here, but you can find solutions that will dramatically reduce or even eliminate almost every availability threat if you are willing to pay the price.
However, adopting a managed availability approach does not necessarily mean addressing every availability risk. In some cases, the benefits may not justify the cost of the solution. The best approach is to go through a triage process. Prioritize the work so that you first tackle projects that will deliver the greatest net benefits (total benefit minus the cost of the solution). Then proceed down your project list until the total benefit of the next project can no longer justify its cost.
Clearly, the most important tool in the managed availability arsenal is knowledge. Understand the nature of the threats. Fully evaluate their potential financial impact. Dig deep to uncover the hidden, yet significant costs. Then carefully research available solutions and choose the ones that best fulfill your requirements and fit your environment. Rigorously adhering to this managed availability approach helps to ensure a superior return on your availability investment.
1. Source: Computer Economics of Carlsbad, California.
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