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Data Center Outage Costs Continue to Rise

Jan. 19, 2016
Latest benchmark study from Emerson and Ponemon Institute finds price of downtime continues to climb; average outage cost rose 38% in five years.

Emerson Network Power, in conjunction with the Ponemon Institute, today released the 2016 Cost of Data Center Outages report that estimates the full costs associated with unplanned outages at data centers. Emerson and the Ponemon Institute polled 63 data center organizations in the U.S. that had experienced an outage in the past 12 months.

The two organizations co-released the original Cost of Data Center Outages study, the first independently conducted research on the cost and causes of data center downtime, in 2010. It was updated in 2013 and again this year. Key findings from the new report include:

  • The average total cost per minute of an unplanned outage increased from $5,617 in 2010 to $7,908 in 2013 to $8,851 in this report.
  • The average cost of a data center outage rose from $505,502 in 2010 to $690,204 in 2013 to $740,357 in the latest study. This represents a 38% increase in the cost of downtime since the first study in 2010.
  • Maximum downtime costs are rising faster than average, increasing 81% since 2010 to a current high of $2,409,991.
  • UPS system failure, including UPS and batteries, is the No. 1 cause of unplanned data center outages, accounting for one-quarter of all such events (see Bar Chart 1 below). Cybercrime represents the fastest growing cause of data center outages, rising from 2% of outages in 2010 to 18% in 2013 to 22% for those sampled in the latest cost of downtime study.

Bar Chart 1: Root Causes of Unplanned Outages

Root causes of unplanned outages: Comparison of 2010, 2013 and 2016 results

“The complexity of today’s data centers continues to create challenges for organizations as they architect and manage their IT infrastructure to reduce costly interruptions,” said Steve Hassell, president of data center solutions for Emerson Network Power. “Our goal with the Ponemon Institute research is to provide industry benchmarks and insight that help organizations make smart business decisions to mitigate costly failures.”

This is the first in a series of five research reports from the two organizations that will create industry benchmarks and provide insight into the key challenges and decision points organizations face as they construct an IT infrastructure to support internal users, partners, suppliers and customers in the digital age.

“Emerson laid out a bold challenge to create benchmarks that would better capture the myriad of challenges data center developers and managers face as they support their organizations’ digital transformations,” said Dr. Larry Ponemon, chairman of the Ponemon Institute.

Bar Chart 2 (below) reports the average cost of outage by primary root cause of the incident. As shown below, IT equipment failures result in the highest outage cost, followed by cyber crime. The least expensive root cause appears to be related to weather followed by accidental/human errors.

Bar Chart 2: Total Cost by Primary Root Causes of Unplanned Outages (thousands of dollars)

Total cost by primary root causes of unplanned outages: Comparison of 2010, 2013 and 2016 results, $1,000 omitted

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