RenovoData Weekly Articles

Businesses are facing many hard-hitting challenges caused by the current economic environment, where technology budgets have become negatively impacted by the credit crunch. According to an article published by the Wall Street Journal in October 2008, 61% of CIOs are currently re-evaluating their budgets, 49% are trying to save money by renegotiating contracts with their vendors, and almost 25% have instituted a hiring freeze - which is a bad sign indicating that many businesses may not have enough staff on hand to complete already started projects on time.  Opportunities for IT cost reduction can be found within key categories where Total Cost of Ownership (TCO) can be reduced, and core areas where remote backup companies enable savings during these hard economic times that many businesses are facing.

The sudden onset of the financial crisis and consequential recession has induced strong growth in IT spending for 2009, causing IT organizations to reevaluate their operating costs and prepare for the worst.   Money is tight and reducing overhead is the key to keeping the doors to the business open.  Globally throughout all industry sectors, IT organizations are searching for ways to operate leaner.  The growth of corporate storage needs and the resulting increased importance of data protection and storage are forcing IT departments to grapple with increased costs and complexities.  By managing an efficient storage environment through outsourcing, centralizing and automating IT functions, organizations will realize a reduction in TCO of storage infrastructure, increased performance and lower overhead.  Hiring a remote backup service providers to handle the operation and maintenance of hardware and software will prove more efficient and cost effective.

A remote backup company assists organizations in achieving a reduction in their TCO through several ways.  Their most immediate means to accomplish this are through eliminating expenses associated with the following:

Hardware and Software.  Includes hardware and software purchases, maintenance and support contracts, training and professional services, upgrades and other software such as virus protection and backup software.

IT Operations.  Components include the costs associated with server deployment, server configuration, network and storage infrastructure, data center power and cooling and other system administration tasks.

Downtime.  Includes costs of restoring services, lost employee productivity and lost revenue.

Business Administration.  These include the labor cost associated with creating orders, obtaining purchase approvals, negotiating vendor contracts and tracking the procurement process.

Tough economic times force downward pressure on IT budgets that require organizations to operate leaner.  When calculating TCO, procurement of assets, IT support, administration, downtime and operation cost are all factors to consider.   Outsourcing a remote backup service provider to uncover the hidden costs and manage IT operations associated with the business can be critical to achieving significant savings as the organization's needs continue to grow.   Eliminating business practices that are significant cost centers for the business, as well as implementing advanced standards of data storage and protection, will have a positive impact on reducing TCO, while inevitably increasing the ROI for the company.

 Before employing a remote backup company to provide offsite data backup services, make sure they host virtualization technologies for disaster recovery, which brings several benefits for small and medium businesses (SMBs).  Among the advantages of virtualization are cost savings and flexibility in the installation of a disaster recovery solution.  Put in a more simple way:  virtualization can reduce the amount of hardware required at a disaster recovery site and simplify recovery operations.  Moreover, virtual machines are independent of the physical hardware they are running on and are completely autonomous.

Virtualized disaster recovery solutions are based on replication and failover and often require a one-to-one pairing of production systems with disaster recovery operations.  Due to inoperable issues with some server-based applications and the complexity of managing such a configuration, it is often not recommended or not possible to failover multiple physical workloads to a single operating system instance running on standard server hardware.  As a result, organizations usually must purchase enough hardware for the disaster recovery site to handle production capacity or make sacrifices by choosing not to protect certain systems and applications. 

By leveraging virtual systems as secondary servers in a standard replication and failover scenario, each virtual machine is its own self-contained, unmodified server image.  These virtual machines can be operated simultaneously on a single piece of hardware, allowing many physical production servers to be protected in a disaster recovery facility.  Since each virtual machine is self-supporting and workloads do not need to be consolidated, managing applications and services during the recovery process is no more difficult than managing them in production.

Generally speaking, a remote backup service provider which hosts a virtualized infrastructure delivers practical solutions for preventing and minimizing downtime by making effective disaster recovery simple and reliable.  Virtualized solutions give SMBs the ability to:

• Build recovery infrastructure using existing servers, rather than installing identical duplicate servers for recovery.

• Cut operational costs related to power, cooling and infrastructure management.

• Do away with dependencies of recovery plans on physical server hardware.

• Eliminate planned downtime or service interruption for many types of maintenance by migrating running workloads to other servers.

• Make rapid disaster recovery attainable, rather than relying on time-consuming restoration from tape or disk backups.

• Extend disaster recovery protection to all critical systems.

• Increase availability across all applications independent of OS and hardware used.

• Minimize outages and unplanned downtime.

• Enable realistic, frequent tests of recovery plans without the cost and complexity of traditional disaster recovery testing.

Fact:  The Underwriting Guide for Insurers by A.M. Best found that only 6% of midsized companies that suffer catastrophic data loss survive; 43% never reopen and 51% close within two years of the disaster.

Today, we are inundated with news of how the unstable economy is affecting businesses all over; from the subprime mortgage crisis to a prolonged global recession.  This has placed disaster recovery spending in the cost category of a mere luxury expense, causing cash and resources to be diverted away from disaster recovery planning as organizations focuses on survival.  Some businesses may allow their disaster recovery contracts to remain idle and business continuity activities to be cancelled or postponed.  Although these actions all save money for the business initially, they do away with cautiously planned defenses, leaving the potential for vulnerabilities such as theft, fraud and equipment failure to be heightened by the recession.

Many businesses are under the misguided assumption that making less money means there is a need to spend less on disaster recovery.   However, this is actually where the emphasis on IT security spending should be placed; as businesses are less likely to bounce back in the event of a financial crisis.  Neglecting this area can have detrimental consequences for businesses of all types.  Disaster recovery should be considered an essential methodology for ensuring business continuity and survival in these tumultuous times.  A comprehensive disaster recovery plan is critical now more than ever.

This is especially important for small and medium-sized businesses (SMBs) where streamlining and cutting back on expenses are inherent in business operations.  However, SMB owners must take into account that without any disaster recovery plan in place, they are at risk of losing revenue that could perpetuate their demise.  Major components that should not be overlooked are data loss prevention and continuous access to mission-critical data.

Disaster recovery planning is like car insurance:  you hope you never get into an accident or have your car stolen or vandalized.  However, if you fall victim to any of these scenarios, the insurance is priceless.  Likewise, no company should go without risk planning and safeguarding their IT resources through some sort of disaster recovery plan.  It makes good business sense to plan for the worst to ensure your business maintains operations in the event of a disaster.  Storing data at a secure offsite backup and disaster recovery location that is far away from facilities where your business primary operates is the best place to begin. 

Fact:  It has been predicted that the number of people affected by data loss is expected to increase this year.  KPMG's Data Loss Barometer stated that the global figure could increase to 190 million in 2009; a 98 million increase of those affected in 2008.  Malcolm Marhsall, partner at KPMG, explained that companies are set to become more vulnerable due to budget constraints brought on by the credit crunch.   KPMG's previous Data Loss Barometer found that half of the reported incidents were caused by internal sources, while 25% were the result of computer theft.