Economics of Downtime

Economics of Downtime

Nijaz Bajgoric (University of Sarajevo, Bosnia)
DOI: 10.4018/978-1-60566-160-5.ch002
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Abstract

After introducing some basic facts on how today’s businesses are faced with several types of business risks, the second chapter tends to explain one of the major problems that a contemporary business may face in regard to the impact of its computing infrastructure to business results. System downtime is briefly explained and the resulting “economics of downtime” is elaborated in order to demonstrate the direct financial impacts of the unavailability of so-called “business-critical applications” to business results.
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Downtime And Uptime

This section introduces basic terms of continuous computing and business continuity: downtime and uptime. It introduces the main framework for so-called “economics of downtime” by providing several empirical data on negative financial effects of system downtime.

A serious glitch on computer system, human error, or any kind of natural disaster (fire, flood, earthquake) can halt or shutdown company’s application environment operated and supported by that computer system, in most cases enterprise server (servers). Such an event can cause partial or full unavailability of enterprise data and applications. When system is not operational for any reason, it is said to be down and the time in which it does not operate is called “downtime.”

Downtime refers to a period of time or a percentage of timespan that a machine or system (usually a computer server) is offline or not functioning, usually as a result of either system failure (such as a crash) or routine maintenance (Downtime, Wikipedia). The opposite is uptime.

Even in the very beginning of the e-business era, more than a decade ago, Datamation (1995) emphasized how important the system downtime is. In August 1995, Datamation quoted the results of a survey of 400 large companies, which unveiled that, “…downtime costs a company $1400 per minute, on average. Based on these figures, 43 hours of downtime per year would cost $3.6 million. One hour of downtime per year amounts to $84,000 per year. ”

Uptime is a measure of the time a computer system has been “up” and running. It is often used as a measure of computer operating system reliability and stability, in that this time represents the time a computer can be left unattended without crashing, or needing to be rebooted for many administrative or maintenance purposes. Long uptime can also indicate negligence as many critical updates require reboot on same operating systems (Downtime, Wikipedia).

In modern business, even a few minutes of system downtime may cause thousands or even millions in lost revenues. In addition, such situations may result in bad decisions, unsatisfied customers, broken image of the company. Simply put, when mission-critical applications are considered, system downtime (both planned and unplanned) should be avoided or minimized. This fact emphasizes the need for system’s reliability, availability and scalability. IDC (2006) underscores the fact that a true high availability model expands the concept of availability beyond an infrastructure perspective in terms of system or servers.

There are many definitions for availability. Some consider availability of the data only, while others speak on applications availability or availability of the server or storage subsystem. Many “buzzwords” are in use, such as:

  • •high availability

  • •business continuity

  • •business continuance

  • •business resilience

  • •always-on computing

  • •24x7x365 computing

  • •fault tolerant computing

  • •disaster tolerant computing

  • •disaster recovery

  • •disaster resiliency

  • •real-time computing

  • •zero latency enterprise, and so forth.

As said before, implications of downtime can be expressed in financial terms and easily bound to company’s economic results. Therefore, the terms such as “economics of availability,” “economics of uptime/downtime” have become topics of interests in the field of the economics of enterprise information systems. Different types of businesses, different business functions and accompanying applications, require different levels of availability. Today, it is possible to measure or estimate losses in financial terms of each hour, even minute of downtime. These losses vary depending on the type of business (e.g., online banking systems, call centres, airline reservation systems, point-of-sale systems, dispatching systems, online shops, e-mail servers, etc.).

Complete Chapter List

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Dedication
Nijaz Bajgoric
Table of Contents
Foreword
Angappa Gunasekaran
Preface
Nijaz Bajgoric
Acknowledgment
Nijaz Bajgoric
Chapter 1
Nijaz Bajgoric
The first chapter aims at defining a “big picture” of contemporary business and business computing. Business pressures and business risks are... Sample PDF
Business Computing in the Internet Era
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Chapter 2
Economics of Downtime  (pages 23-39)
Nijaz Bajgoric
After introducing some basic facts on how today’s businesses are faced with several types of business risks, the second chapter tends to explain one... Sample PDF
Economics of Downtime
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Chapter 3
Nijaz Bajgoric
The previous chapter introduced the two major concepts of continuous computing: downtime and uptime. Chapter three goes a step further and aims at... Sample PDF
Business Continuity and Business Continuity Drivers
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Chapter 4
Nijaz Bajgoric
Based on the framework defined in Chapter III, the fourth chapter discusses the models of information architectures that are used in implementing... Sample PDF
Information Architectures for Business Continuity
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Chapter 5
Nijaz Bajgoric
After identifying major downtime points within a client-server architecture in Chapter IV, Chapter V discusses in more details enterprise servers... Sample PDF
Server Operating Environment and Business Continuity Drivers
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Chapter 6
Server Operating Systems  (pages 103-131)
Nijaz Bajgoric
Server configurations described in Chapter V are operated by server operating systems. Server-based application software and business-critical... Sample PDF
Server Operating Systems
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Chapter 7
Nijaz Bajgoric
Server operating systems described in Chapter VI usually come preinstalled. Additional components can be installed “on-demand” in the form of... Sample PDF
Advanced Server Technologies for Business Continuity
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Chapter 8
Nijaz Bajgoric
Chapter VIII discusses the server operating systems’ main attributes from the selection perspective. Several selection criteria are explained... Sample PDF
Choosing the Server Operating Platform for Business Continuity
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Chapter 9
Nijaz Bajgoric
Chapter IX focuses on the role of system administration as an IT-profession and system administrator as a person who does the administrative... Sample PDF
System Administration and System Administrator's Role in Business Continuity
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Chapter 10
Nijaz Bajgoric
Chapters V-IX dealt with server operating environment and its role in ensuring business continuity mostly in cases of ongoing data processing... Sample PDF
Backup and Recovery Technologies for Business Continuity
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Chapter 11
Nijaz Bajgoric
In addition to standard storage and traditional tape-based backup technologies explained in Chapter X, businesses employ advanced storage... Sample PDF
Advanced Storage Technologies for Business Continuity
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Chapter 12
Nijaz Bajgoric
Continuous computing technologies explored in previous chapters, in many cases, are located on different locations. However, they depend on each... Sample PDF
Networking Technologies for Business Continuity
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Chapter 13
Nijaz Bajgoric
After explaining several continuous computing technologies in previous chapters, the book focuses on business continuity management in Chapter XIII.... Sample PDF
Business Continuity Management
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Chapter 14
Nijaz Bajgoric
Continuous computing technologies are employed in order to achieve business continuity from the business operations perspective. In the same time... Sample PDF
Business Continuity for Business Agility
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About the Author