Fewer Companies Outsourcing Disaster Recovery

February, 2017

Because information technology plays a significant role in the support and function of nearly all business operations, it is essential for IT organizations to be able to restore services after a disaster or disruption. While most organizations keep the critical disaster recovery function in-house, outsourcing can be very helpful to take advantage of skills and resources that are difficult or expensive to maintain.

Many IT organizations are finding value in disaster recovery outsourcing. However, as shown in Figure 2 from the full report, Disaster Recovery Outsourcing Trends and Customer Experience, the percentage of organizations outsourcing this function dropped in 2016 to 36%, after staying relatively static from 2012-2014, Figure 2 shows. On the other hand, the outsourcing level is very high, meaning that when organizations outsource disaster recovery, they often outsource most or all of it.

DisasterOut fig 2 - Fewer Companies Outsourcing Disaster Recovery

The goal of disaster recovery is to mitigate risk, and the cost and risk of outages is rising. The amount of business transacted online continues to expand, even for traditional brick-and-mortar organizations, making the cost of downtime more expensive. Factories and distribution centers are increasingly automated, and operations can grind to a halt if a disaster strikes. A network outage can be disastrous for healthcare providers that increasingly rely on digital images and electronic medical records for patient care. Moreover, in some industries, such as banking, disaster recovery capabilities are mandated by law.

“Disaster recovery outsourcing is a vital consideration for nearly all companies, but businesses should keep in mind that disasters don’t just come in the form of natural events like floods or earthquakes,” said Tom Dunlap, research director for Computer Economics, an IT research firm based in Irvine, Calif. “Most of the ‘disasters’ that trigger disaster recovery plans are far less dramatic—things like local power outages, blackouts, or human error. Preparing for every eventuality can often require additional expertise and resources, and getting help is often useful.”

One of the biggest trends in this area is the disaster-recovery-as-a-service (DRaaS) market, which has grown rapidly during the past two years. DRaaS offers the potential for greater flexibility, reduced costs, and more frequent, less-expensive testing. The DRaaS leaders include many tech behemoths—Amazon, Hewlett Packard Enterprise, IBM, Microsoft, Verizon, VMware, etc.—as well as scores of smaller providers.

To help IT executives understand their options, the full report analyzes the percentage of organizations outsourcing disaster recovery capabilities (frequency), the scope of work outsourced (level), and the change in the amount of work being outsourced (trend). We also present data on the cost and service experiences of IT organizations that outsource disaster recovery.

This Research Byte is a brief overview of our report on this subject, Disaster Recovery Outsourcing Trends and Customer Experience. The full report is available at no charge for Computer Economics clients, or it may be purchased by non-clients directly from our website (click for pricing).