Application Downtime Costing Enterprises $16 Million Each Year

New research from Veeam Software, Inc. illustrates that despite numerous high-profile incidents in the last year, enterprises are still not paying enough attention to the needs of their users.

In its fifth year, Veeam Availability Report showed that 84%, a 2% increase on 2014, of senior IT decisions-makers (ITDMs) across the globe admit to suffering an ‘Availability Gap’ (the gulf between what IT can deliver and what users demand). This costs businesses up to $16 million a year in lost revenue and productivity, in addition to the negative impact on customer confidence and brand integrity (according to 68% and 62% of respondents respectively).

This figure has risen a staggering $6 million in 12 months, despite almost all respondents saying that they have implemented tightened measures to reduce availability incidents and that 48% of all workloads classified as ‘mission-critical (rising to 53% by 2017).

With the number of the world’s connected population soaring to record levels last year (3.4 billion or around 42% of the globe) and predictions there will be almost 21 billion connected devices by the end of 2020, the need to deliver 24/7 access to data and applications has never been more important. However, it seems that enterprises have not received that message despite more than two-thirds of respondents stating that they have invested heavily in data center modernization specifically to increase availability levels.

“When you talk to more than 1,000 senior ITDMs you expect that there will be some that are still struggling to deliver on the needs of the Always-On Enterprise – the Enterprise that operates 24/7/365, but these findings are alarming,” stated Ratmir Timashev, CEO, Veeam. “Modern enterprises are becoming software-driven businesses, so IT departments can no longer get away with services that are ‘ok’; always-on availability is paramount. However, since our last study, the number of annual unplanned downtime events have increased (from 13 to 15) and they are also lasting longer and taking a far greater amount of time to recover. In today’s economy, where speed and reliability are imperative, this is unacceptable. If this trend continues, I fear for the companies we surveyed.”

Key findings in 2016 Veeam Availability Report include:

Availability is of paramount importance… yet enterprises are failing

• Users want support for real-time operations (63%) and 24/7 global access to IT services to support international business (59%).
• When modernizing their data centers, high-speed recovery (59%) and data loss avoidance (57%) are the two most sought-after capabilities; however, cost and lack of skills is inhibiting deployment.
• Organizations have increased their service level requirements to minimize application downtime (96% of organizations have increased the requirements) or guarantee access to data (94%) to some extent over the past two years, but the Availability Gap still remains.

To address this, however, respondents stated that their organizations are currently, or are intending in the near future, to modernize their data center in some way – virtualization (85%) and backups (80%) are among the most common areas to update for this purpose.

“What data protection and disaster recovery methods
does your organization currently use/plan to use in two years?”
Asked to all (1,140 respondents)

Data at risk

• SLAs for RTOs have been set at 1.6 hours, but respondents admit that in reality recoveries taken 3 hours.
• Similarly, SLAs for recovery point objectives (RPOs) are 2.9 hours, whereas 4.2 hours is actually being delivered. Respondents report that their organization, on average, experiences 15 unplanned downtime events per year. This compares to the average of 13 reported in 2014. With this, unplanned mission-critical application downtime length has increased from 1.4 hours to 1.9 hours year over year, and that non-mission-critical application downtime length has increased from 4.0 hours to 5.8 hours
• Just under half only test backups on a monthly basis, or even less frequently. Long gaps between testing increase the chance of issues being found when data needs to be recovered – at which point it may be too late for these organizations. And of those that do test their backups, just 26% test more than 5% of their backups.

Financial impact is substantial

• As a result, the estimated average annual cost of downtime to enterprises can be up to $16 million. This is an increase of $6 million on the equivalent 2014 average.
• The average per hour cost of downtime for a mission-critical application is just under $80,000. The average per hour cost of data loss resulting from downtime for a mission-critical application is just under $90,000.
• When it comes to non-mission-critical applications, the average cost per hour is over $50,000 in both cases.
• Loss of customer confidence (68%), damage to their organization’s brand (62%), loss of employee confidence (51%) were the top three ‘non-financial’ results of poor availability cited.

“On average, approximately how long does each individual instance
of unplanned downtime
(i.e., caused by IT failures, external forces or other factors)
of your organization’s applications last?”
Asked to all, comparable data (760 respondents in 2014, 630 respondents in 2015)

“What other impacts could result in your organization
from application downtime or data loss?”
Asked to all (1,140 respondents)

“While it’s easy to think that this survey paints a picture of doom and gloom, there are shoots of optimism as well,” added Timashev. “Almost three quarters of enterprises recognize that they have areas which need addressing and intend to do so in the next six to 12 months. It is not always easy to divert precious funds to invest on infrastructure, but there is acceptance that this needs to be done. We are seeing enterprises starting to realize the importance of availability solutions and, in particular, the role cloud and cloud-based services such as DR as a Service can play. Enterprises appreciate the need for an Always-On, always-available operation and I am confident that users will see this become a reality sooner rather than later.”

Survey methodology
Veeam commissioned independent technology market research specialist, Vanson Bourne, to undertake a global research project during late 2015, 1,140 senior ITDMs from enterprise-sized organizations were interviewed from the following countries: US, China, France, Germany, UK, Argentina, Australia/New Zealand, Brazil, Czech Republic, Hong Kong, Italy, Japan, Malaysia, Mexico, Netherlands, Nordics, Poland, Russia, Saudi Arabia, Singapore, South Africa, Spain, Switzerland, and the UAE.

Full report  (registration needed)