Calculating the true cost of cloud outages

Grazed from InfoWorld. Author: David Linthicum.

Amazon.com had an outage for 49 minutes on Jan. 31, and it cost big — more than $4 million in lost sales. I’m sure many in the cloud computing community where thinking, "Now you know how it feels." According to Network World’s Brandon Butler, "Amazon officials have said that the biggest customer of the company’s cloud division — AWS (Amazon Web Services) — is Amazon.com. AWS has experienced a variety of outages during the past three years, but usually the Amazon.com retail site is not impacted."

For example, an EBS (Amazon Elastic Block Storage) outage in October 2012 affected such customers as Reddit. Moreover, an outage on Christmas Eve 2012 brought down Netflix, but not the video steaming service that Amazon.com provides. In the Jan. 31 case, Amazon.com appears to the affected party…

What does this cost? Butler makes a valid case in his article: "Amazon.com’s latest earnings report showed that the company makes about $10.8 billion per quarter, or about $118 million per day and $4.9 million per hour." For every hour it is not up and running, Amazon.com takes a hit of almost $5 million. These calculations demonstrate that you should understand the true cost of cloud outages as you move more of your processes and data to public cloud services. I’ve found that businesses either overestimate or underestimate the cost of outages. You need to understand the true cost to create effective SLAs or to determine the correct amount of investment that should be made in cloud services…

Read more from the source @ http://www.infoworld.com/d/cloud-computing/calculating-the-true-cost-of-cloud-outages-212253