Outsourcing disaster recovery services vs. in-house disaster recovery

Whether or not to outsource your disaster recovery (DR) or create a DR site in-house can be a tough decision. Learn about the pros and cons of outsourcing disaster recovery.

Whether to create a disaster recovery (DR) site in-house or to outsource disaster recovery is a fundamental decision that needs to be made when creating a disaster recovery strategy. The in-house approach may be tempting, with the assumption that the work related to DR can be performed by existing staff. Unfortunately, experience shows that in-house disaster recovery is more likely to fail than outsourced DR services.

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According to an IDC study, enterprises that didn't outsource lost on average $4 million per disaster incident across a variety of business functions (e.g., sales/marketing, financing, e-commerce). In contrast, enterprises that outsourced to a third party lost an average of $1.1 million per incident. The study adds that companies that leverage an in-house model spend 32% more than those opting to outsource.

The study further shows that outsourcers can provide a shorter window of recovery, as measured by recovery time objective (RTO) over in-house operations by a reduced factor of 0.62. The study concludes that primary and DR data centers are more likely to get out of sync if disaster recovery services are performed in-house.

In-house disaster recovery scores low because many users are overloaded with extra work because of it. When a person's primary role is in conflict with their disaster recovery role, the primary role usually wins, to the detriment of the disaster recovery plan.

Calculating the cost of disaster recovery

Determining the cost of disaster recovery is company-specific. Multiple variables make it difficult to devise a formula to calculate a disaster recovery cost for a given environment. In general, the cost of DR includes the cost for physical space, equipment, power, and network and professional services. But the cost of each of those components can vary greatly. "We have tried to put together a TCO tool, but data centers are too different, and our DR options are so customized that it's very difficult to come up with a cost calculator," said David Palermo, vice president of marketing at SunGard Availability Services.

Fujitsu Computer Systems Corp.'s Affordable Business Continuity (ABC) product is one of the few packaged DR kits that includes storage, hosting and bandwidth for a fixed cost of $190,000. The ABC kit includes two Eternus 4000s with 3 TB of raw storage each, replication software and one year of hosting with bandwidth. Fujitsu's professional services works with customers on customized bundles and assists with determining the required server infrastructure (servers aren't included in the bundle).

Disaster recovery site options

The prevailing options for DR sites are remote-office locations, collocation space and managed DR service providers' data centers.

Remote-office location and collocation space: Companies with multiple locations frequently use their remote data centers as disaster recovery sites. Leveraging existing facilities and infrastructure is a very cost-efficient DR option. For companies with multiple locations, but not multiple data centers, collocation space offered by providers like Equinix Inc., Savvis Inc. and Telcos, may be a good alternative. Collocation facilities are relatively cost effective and usually provide first-class space with sufficient power, bandwidth and high facility standards.

Cost was the primary reason why Matt Blydenburgh, CIO at Tannenbaum Helpern Syracuse & Hirschtritt LLP in New York City, used collocation space in Connecticut for the firm's hot site. Blydenburgh uses Double-Take Software to replicate data from the firm's New York City location to its hot site in Connecticut. "We looked at managed disaster recovery services from companies like SunGard, but it was very expensive," said Blydenburgh. "We now pay $1,800 for space and another $1,600 for bandwidth for both sites."

Managed disaster recovery service providers: Managed disaster recovery services providers like Hewlett Packard (HP) Co., IBM Corp., Recovery Point Systems and SunGard are dedicated to disaster recovery and are hard to beat in the quality of service they provide. But they're not cheap. To get a fair price comparison between a managed service and using in-house disaster recovery facilities, it's essential to take into account all cost components, including the cost of a dedicated DR staff.

With 155 disaster recovery data centers worldwide, IBM is the largest managed DR firm. Similar to HP, IBM can source all disaster recovery components from within IBM. With 30 U.S. and 30 European data centers, and approximately 12,000 customers worldwide, SunGard is also a major player in the managed disaster recovery space. Prior to its acquisition of Electronic Data System (EDS), HP was focused mostly on providing managed DR for companies using HP equipment, but HP is now playing at the same level as IBM. Smaller DR services firms have the advantage of flexibility and are more willing to wheel and deal to win a contract.

Even in financially challenging times, you should never walk away from disaster recovery plan because you can't afford a certain DR tier. Instead, go with a lower, less-expensive tier that gives reasonable protection for the available budget. Not having a disaster recovery plan should never be an option.

This article originally appeared in Storage magazine.

About this author: Jacob Gsoedl is a frequent contributor to "Storage" magazine.

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