Study: Downtime for U.S. data centers costs $7900 per minute

Dec. 3, 2013
Research conducted by Ponemon Institute considers direct, indirect and opportunity costs.

A study recently conducted by Ponemon Institute and sponsored by Emerson Network Power (ENP) shows that on average, an unplanned data center outage costs more than $7,900 per minute. That number is a 41-percent increase over the $5,600-per-minute quantification put on downtime from Ponemon’s similar 2010 study. “Data center downtime proves to remain a costly line item for organizations,” ENP said when announcing the study’s results.

The 2012 report analyzed costs at 67 data centers within the past year. Each facility examined had at least 2,500 square feet of data center space. ENP says the study “provides a comprehensive analysis of the direct, indirect and opportunity costs from data center outages, including damage to mission-critical data, impact of downtime on organizational productivity, damage to equipment, legal and regulatory repercussions, and lost confidence and trust among key stakeholders.”

Related story: Study drills down on effects of data center outages

Ponemon Institute’s chairman and founder Larry Ponemon commented, “Given the fact that today’s data centers support more critical, interdependent devices and IT systems than ever before, most would expect a rise in the cost of an unplanned data center outage compared to 2010. However, the 41-percent increase was higher than expected. This increase in cost underscores the importance for organizations to make it a priority to minimize the risk of downtime that can potentially cost thousands of dollars per minute.”

Other highlights of the report include the following.

  • The average reported incident length was 86 minutes, resulting in an average cost per incident of approximately $690,200.
  • For a total data center outage, which had an average recovery time of 119 minutes, average costs were approximately $901,500.
  • For a partial data center outage, which average 56 minutes in length, average costs were approximately $350,400.

For each of the three data points above, the average outage time was lower in the 2013 study than it was in the 2010 study, but the cost of each outage was higher due to the significantly higher cost-per-minute of each incident.

“Those organizations with revenue models that depend on the data center’s ability to deliver IT and networking services to customers—such as telecommunications service providers and e-commerce companies—and those that deal with a large amount of secure data—such as defense contractors and financial institutions—continue to incur the most significant costs associated with downtime, with the highest cost of a single event more than $1.7 million,” ENP said when commenting on the study and its results.

These types of industries experiences a 2- to 5-percent decrease in per-minute outage costs when compared to 2010, ENP added, “while those organizations that traditionally have been less dependent on their data centers saw a significant increase. The largest increase was in the hospitality sector, which saw a 129-percent increase, followed by the public sector [116 percent], transportation [108 percent] and media organizations [104 percent].”

Peter Panfil, vice president, global power with ENP, said, “As data centers continue to evolve to support businesses and organizations that are becoming more social, mobile and cloud-based, there is an increasing need for a growing number of companies and organizations to make it a priority to minimize the risk of downtime and commit the necessary investment in infrastructure technology and resources. This report gives these organizations the data they need to support more-informed business decisions regarding the cost associated with eliminating vulnerabilities compared to the costs associated with not taking action.”

Emerson Network Power created this infographic summarizing the downtime costs and other findings from the study. You also can find more detail on the study here.

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