2.2 Step 1: What is the cost of Exchange downtime?

It is often difficult to know where to start if you are trying to determine how much Exchange server downtime will cost your organization. We might begin by imagining a world without e-mail or collaborative functionality (like calendaring). How would this impact your company’s ability to function? What productivity impact would this have on individual users? Often, organizations fail to recognize the value of a particular service offer by IT until the service is gone or inoperable. As you start to investigate Exchange downtime in your organization and answer these questions for yourself, keep in mind that every organization will answer these questions differently depending on several factors. How an organization uses its messaging system, as well as how this functionality impacts business operations and processes, will be the root of how these questions are answered.

Step 1 of the process focuses on understanding what happens to your organization when the messaging system goes down. This can run the gambit from being catastrophic to inconvenient. This may also vary by department or business activity. For example, some departments may be able to do without the ability to send e-mail for several hours or longer. Other departments, such as customer service, shipping, or supply-chain management, may require constant use and access to e-mail, as well as collaborative applications that may be deployed using Exchange. In addition, as more business processes are automated and made available as collaborative or knowledge-management applications, the Exchange system will become more mission critical. In order to measure the cost of downtime, you need to know the answer to the question, Who gets hurt and how badly? Obviously, I cannot answer this question for each and every organization.

However, there is some research available for Exchange Server from various organizations that can shed some light on the cost of Exchange downtime in a general sense. Creative Networks, Inc. (CNI) published a study in 1998 called “Benchmark TCO: Microsoft Exchange and Lotus Notes/ Domino in the Enterprise” that explained reliability and the cost of downtime for Exchange Server and Lotus Notes/Domino environments. Table 2.1 summarizes some of the report’s findings where downtime is concerned (please note that although this data is not recent, it is the most recent study of Exchange downtime available).

Table 2.1: Downtime for Exchange and Domino Compared

	Microsoft Exchange Server	IBM/Lotus Domino
Unscheduled or unplanned downtime incidents per month	2.0	3.2
Length of typical downtime incident (minutes)	97	35
Total downtime per month (minutes)	136.0	375.9
Total downtime per year (hours)	27.2	75.2
Source: Creative Networks, Inc. (CNI), 1998.

I found two things to be notable in this study. First, Exchange deployments were found to experience significantly fewer unscheduled or unplanned downtime incidents in a typical month. Closely related was the fact that Exchange also experiences less total downtime per month and per year than Lotus Notes/Domino. The second point is even more important for our discussion. Although Exchange deployments experience fewer incidents and less total downtime, incidents in the Exchange environment tend to last longer. According to CNI, the length of a typical incident for Exchange is 97 minutes versus 35 minutes for Lotus Notes/Domino.

A more recent study conducted by Contingency Planning Research and Contingency Planning & Management Magazine in 2001 looks at the cost of downtime to an organization. While the study and accompanying survey did not look at Microsoft Exchange deployments specifically, the results are still interesting to Exchange system managers who understand how business critical their Exchange servers have become and how their companies rely on messaging systems as an integral part of day-to-day business operations and activities. Some interesting findings resulted from this cost-of-downtime survey (results are shown graphically in Figure 2.2):

• 46% of companies responded that each hour of downtime would cost $50,000.

• 28% responded that each hour of downtime would cost between $51,000 and $250,000.

• 18% responded that each hour of downtime would cost between $251,000 and $1 million.

• 8% responded that each hour of downtime would cost more than $1 million.

  
  Figure 2.2: The cost of downtime.

Regardless of what business-critical system you discuss, the cost of downtime for most companies is substantial. When moving through step 1 (the cost of downtime), you will need to answer the questions about who is affected and how much it costs your business. The areas to look at are processes, programs, projects, revenue, people, and operations. For processes, vital business processes might be interrupted, lost, corrupted, or altered if your Exchange deployment falters. Such processes might include order and supply-chain management, financial reporting, transaction-notification systems, manufacturing systems, human resources, and so forth. When downtime affects programs or projects, both long-term and short-term revenue can be impacted. Also, key important customer and/or employee transactions or activities can be missed. In the age of “e-business” or “@business,” if customers cannot access systems of which messaging is a key component, they may not come back, and they will most likely end up with your competitors.

People can also be impacted when systems are unreliable. I have not had direct exposure to messaging systems that directly provide life-sustaining medical systems, but I can easily envision a day when these systems will rely on messaging and knowledge-management technologies like those provided by Exchange. Imagine, however, a 911 call center or a hospital that relies on some sort of messaging system for different aspects of this vital service. From an operations point of view, it is not hard to see how an operations staff managing the daily activities of an organization could be impacted by the loss of the messaging system. The organization could potentially grind to a halt when this staff finds itself without required data or with lost information and key reports incomplete or corrupted.

To illustrate a real-world example, one of my side activities used to be writing a column for a weekly electronic-newsletter that is e-mailed to more than 80,000 subscribers. This newsletter contains time-sensitive information and also relies on sponsorship for support. Exchange is used as the messaging system that handles the mailing of this newsletter each week. If the system goes down and the newsletter does not get out, readers will be disappointed, and sponsors may discontinue their support. This has a very real revenue impact on the company that publishes the newsletter. Getting back to some research data, CNI’s 1998 study also found that the impact of downtime on the end user for Microsoft Exchange was less than in the Lotus Notes/Domino environment. Table 2.2 summarizes the overall cost impact per end user. Keep in mind that this research data is based on respondents’ feedback to surveys and interviews and may not reflect the actual measure for your own organization.

Table 2.2: Impact of Downtime on an End-user Basis

	Microsoft Exchange Server	Lotus Domino
Downtime per year (hours)	27.2	75.2
Likelihood of end user impact	33.9%	31.9%
Productivity loss if impacted	25.7%	20.7%
Annual downtime-induced productivity loss (hours)	2.37	4.86
Annual per-user cost of downtime-induced productivity loss	$43.66	$93.37
Source: Creative Networks, Inc. (CNI), 1998.

In addition to productivity losses caused by downtime, revenue can also be impacted. In their research, CNI calculated the annual revenue loss per end user. For Microsoft Exchange Server, CNI found that $127.85 per end user annually was the average downtime revenue loss for an organization surveyed. This compared well with Lotus Notes/Domino, which was roughly double that figure. In other words, the per-user cost of downtime annually for Exchange is about $171 ($43.66 + $127.85), according to CNI’s 1998 research study. Again, these numbers may be different for your organization, and this data is a bit stale (no one has done a more recent comprehensive study of Exchange Server downtime). However, calculations such as these cited from CNI’s research might give you an idea of some areas you could investigate. Organizational loss can be measured by much more than money alone. In most cases, however your management will be motivated by money. It is important for you to evaluate the various areas of your organization that are most impacted by the loss of a messaging system. For some organizations, this will simply be an annoyance. For others, the loss of e-mail, calendaring, or other Exchange-provided services could be more serious. Spend some time accessing each area and assigning the costs associated with the loss, because if you cannot accurately quantify what downtime will cost you, you cannot accurately decide how much to spend to reduce or prevent it.