R&M Data Center Handbook

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The following diagram shows how to calculate the cost of downtime.
Lost end-user productivity = Hourly cost of users impacted x Hours of downtime
Costs arising
during the
downtime
Lost IT productivity =
Hourly cost of the IT staff
impacted
x
Hours of downtime
Lost sales = Loss of sales per hour x Hours of downtime
Costs arising after
the downtime
Other loss of business
=
Image damage
(customer service)
+ Costs of overtime
= Missed deadlines + Contractual fines or fees
Source: securitymanager 2007
The report "Avoidable Cost of Downtime" was commissioned by CA in 2010. The survey was carried out among
more than 1,800 companies, 202 of them in Germany. It reveals that systems in German companies are shut
down for an average of 14 hours per year, 8 hours of which are required for full data restoration.
France € 499,358
Germany € 389,157
Norway € 320,069
Spain € 316,304
Sweden € 279,626
Netherlands € 274,752
Finland € 263,314
UK € 244,888
Denmark € 161,655
Belgium € 84,050
Italy € 33,844
A publication by Marsh before the year 2000 provided the following figures:
• Costs for a 24-hour downtime are approx.:
o Amazon 4.5 million US dollars
o Yahoo! 1.6 million US dollars
o Dell 36.0 million US dollars
o Cisco 30.0 million US dollars
• AOL, Aug. 6, 1996, breakdown of 24 hours due to maintenance and
human error, estimated costs were 3 million US dollars for discounts
• AT&T, April 4, 1998, 6-26 downtime due to software conversion, costs
were 40 million US dollars for discounts
IT system downtimes that last longer than three days are considered existencethreatening
for companies!
54 percent of customers switched to a competitor as a result of an IT system
failure (Symantec study, 2011).
2.4. Customer Perspective
The following sections focus on the point of view of customers and decision-makers; their motives and what they
expect from a data center, taking into account operational costs and energy consumption costs. The various
aspects to consider when deciding between outsourcing and operating your own data center will also be
discussed.
2.4.1. Data Center Operators / Decision-Makers
When discussing decision-makers and influencers with regards to decisions around data centers, it is best to
distinguish between these two types:
• enterprise data centers and
• service data centers
Page 36 of 156 © 08/2011 Reichle & De-Massari AG R&M Data Center Handbook V2.0