Study puts hefty price tag on data center downtime

May 12, 2011
Based on information from data centers that had unplanned outages, the cost-per-minute average swells above $5,000.

A study sponsored by Emerson Network Power and conducted by Ponemon Institute concludes that, on average, every minute of data center downtime costs an organization thousands of dollars. In its executive summary, the institute says, "Our research indicates data center outages have serious financial consequences for an organization. According to the study, the cost of a data center outage ranges from a minimum cost of $38,969 to a maximum of $1,017,746 per organization, with an overall average cost of $505,502 per incident." In a release from Emerson Network Power, the company says that the study shows an average cost of more than $5,000 per minute for data center downtime.

The study took information from 41 data centers, each of which had a minimum facility size of 2,500 square feet and each of which had experienced at least one unplanned outages over a 12-month period. Ponemon considered the following costs and losses in calculating its totals.

  • Detection cost
  • Containment cost
  • Recovery cost
  • Ex-post response cost
  • Equipment cost
  • IT productivity loss
  • User productivity loss
  • Third-party cost
  • Lost revenues
  • Consequences of business disruption

Emerson says the report it produced based on this 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 organization productivity, legal and regulatory repercussions, and lost confident and trust among key stakeholders. It also examines how power, cooling, monitoring and service inadequacies can contribute to a facility's risk."

In addition to concluding that the average cost-per-minute of downtime exceeds $5,000, the Emerson report says the average reported incident duration was 90 minutes; the average duration of a total data center outage (as opposed to a partial outage) was 134 minutes; and the average duration of a partial outage was 59 minutes.

It adds that the stakes are higher for some than for others. Enterprises like telecommunications service providers and e-commerce companies have the most to lose, Emerson says. Their cost-per-downtime-minute can be $11,000.

The Ponemon study includes a number of caveats. Among them is that the sample is representative and non-statistical so the study's purpose was to be descriptive rather than normative inference. Also, the 41 responses came from among more than 400 organizations asked to participate. The institute also said it believes the study leaned toward companies with more mature data center operations.

You can read the Ponemon Institute study, entitled "Calculating the Cost of Data Center Outages," here. You can read the Emerson Network Power report here.

You may also be interested in this story, Data center users: Management, cooling, uptime dominate concerns, based on a survey of Emerson Network Power's Data Center Users' Group.

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