Event Recap
RECAP | ROUNDTABLE | Calculating Costs of Downtime
Discussions at Uptime Institute’s May 7th, 2019, Calculating the cost of outages roundtable revealed that data center operators value the ability to calculate the costs of outages, but their organizations do not always agree. In some cases, organizations may not make the commitment to develop the cost estimate. In other cases, poor communications between IT and business units limit the flow of information.
Uptime Institute Executive Pitt Turner helped frame the roundtable discussion. He outlined the complexity of calculating outage costs. Noting that the length of the outage as well as the business functions affected complicated any effort to calculate the cost of an outage. He also noted that guidelines for estimating the length of an outage were imprecise and often understated how long it would take to restore IT operations after infrastructure had been restarted. He also noted that organizations had to decide what they would measure: lost sales, gross margins, reputational costs, infrastructure costs, according to their business models.
Participants noted that having accurate outage estimates—or the ability to create their own—would enable them to do cost/benefit analysis on infrastructure investments. It was also noted that executives sometimes made decisions without considering all the ramifications, in one case creating a strategy that depended, in part, on using an aging Tier I facility at the edge of required latency limits as a disaster recovery facility.
Another participant noted that his organization could develop outage cost estimates to submit to vendors in order to recoup costs but that he had no knowledge how these were developed and did not participate in these cost developments.
One participant shared his company’s (anonymized) scheme for developing cost estimates as a basis for further discussion. The document had been carefully developed and included input from across the organization. Unfortunately, it had been allowed to become outdated.
The group agreed with the sentiment that further discussion might be beneficial to industry.
Uptime Institute Executive Pitt Turner helped frame the roundtable discussion. He outlined the complexity of calculating outage costs. Noting that the length of the outage as well as the business functions affected complicated any effort to calculate the cost of an outage. He also noted that guidelines for estimating the length of an outage were imprecise and often understated how long it would take to restore IT operations after infrastructure had been restarted. He also noted that organizations had to decide what they would measure: lost sales, gross margins, reputational costs, infrastructure costs, according to their business models.
Participants noted that having accurate outage estimates—or the ability to create their own—would enable them to do cost/benefit analysis on infrastructure investments. It was also noted that executives sometimes made decisions without considering all the ramifications, in one case creating a strategy that depended, in part, on using an aging Tier I facility at the edge of required latency limits as a disaster recovery facility.
Another participant noted that his organization could develop outage cost estimates to submit to vendors in order to recoup costs but that he had no knowledge how these were developed and did not participate in these cost developments.
One participant shared his company’s (anonymized) scheme for developing cost estimates as a basis for further discussion. The document had been carefully developed and included input from across the organization. Unfortunately, it had been allowed to become outdated.
The group agreed with the sentiment that further discussion might be beneficial to industry.
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