Downtime costs are visible and invisible. While most organizations are conscious of the visible costs of downtime, the invisible costs often escape notice. While it is possible to set benchmarks to the different components of downtime costing, they remain—at best—cost estimations.
Downtime costing at a very basic level distinguishes between planned and unplanned down time. Planned downtime is downtime that is considered imperative for maintenance activities that will ensure that unplanned downtimes do not occur. So, planned downtime begins with an estimation of the dependability, reliability and high availability of hardware and software resources with the organization and the number of hours of planned downtime required for preventing unplanned downtime. Organizations expect to bear and are willing to bear planned outages in the interest of the enterprise. It is a line item in their budget and estimated costs are factored in.
Unplanned outage is an unexpected, unforeseen loss. Most enterprises are distressed by unplanned outages. Unplanned outage cost is equated to the downtime hours multiplied by the cost per hour of downtime. Invisible costs are estimated for loss of potential customers, leads, employee productivity and a host of other invisible costs in terms of loss of company morale and loss of management confidence. The equation that is arrived at may read as under:
Estimated Average cost of one hour of downtime = Employee cost per hour x Fraction of employees’ affected + Average revenue per hour x Fraction of revenue affected + Revenue from sales per hour x Fraction of sales revenue effected ….
It is evident from the above discussion that it is difficult to arrive at precise numbers for many of the components of downtime costing. So, how does one set about monitoring downtime costs in real-time?
If you have read service level agreements of online backup service providers with some attention, you may have noted that they offer 0% downtime to their customers. These service providers are not costing downtime—real-time. They are avoiding costing downtime by preventing downtime. They monitor all kinds of possible outages and redundantly provision for it so that their customers never feel the pinch of it.
Elaborate network monitoring and management technologies are pressed into service to log every system outage that may occur over the period of a month, while outages are avoided by ensuring high availability and reliability of systems that service the customer. Mirror servers, failover servers and “hot sites” are set up to seamlessly take over customer server requests at the point of failure. The customer may never know that the service provider’s server has failed and the data requests are being serviced from a mirror server located in a disaster recovery site. Enterprise customers may never realize that their requests are being serviced by enterprise personnel using Internet browser application access while local systems are being repaired. Customer and enterprise employee productivity/morale remains high and there is no loss of business.
All other kinds of failures—including some local failures within the customer location–are monitored by sophisticated network monitoring systems of the backup service provider. System alerts are automatically generated if a backup or recovery fails due to ISP failure or bandwidth choking. The service provider logs record the information in real-time and it is possible for the customer to recover and analyse the information for outage costing. As a result, downtime costing becomes simpler at the customer end of the network.