Outsourcing of Disaster Recovery Continues Decline

April, 2018

Because information technology plays a significant role in the support and function of nearly all business operations, it is essential that IT organizations be able to quickly restore services after a disaster or any disruption. Many IT organizations find value in disaster recovery outsourcing, where a service provider is responsible for off-site data storage, recovery data centers, or redundant systems that are used in the event of a disaster. However, the number of companies choosing to outsource this function has dropped significantly in the past two years.

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 2017 to 34%, after a high of 49% just two years ago. This decline is despite positive experiences being reported in both cost and service levels.

DRoutsourcing fig 2 - Outsourcing of Disaster Recovery Continues Decline

“It appears that CIOs increasingly want to keep this function in-house,” said David Wagner, vice president for research at Computer Economics, an IT research firm based in Irvine, Calif. “This makes sense to a certain extent. Even when outsourced, DR is so mission-critical that leaders are wise to keep a close eye on vendors and coordinate DR plans regularly. Still, IT leaders should be aware that cloud options are making DR outsourcing easier and more secure. Experience is positive, and specialized skills available from vendors can be invaluable.”

The cloud is one of the causes for the decline in DR outsourcing. On one level, the cloud, particularly public cloud offerings, have changed the workloads that organizations keep in-house. The public cloud offers the potential for better uptime, more redundancy, and better storage options. Software-as-a-service (SaaS) solutions also can take some of the workload from in-house resources and provide similar backup capabilities.

On the other hand, cloud computing is more network-intensive, and connectivity can be difficult to maintain in disasters. Cloud computing providers also require that organizations accept that some outages will happen outside the provider’s control. If a SaaS or infrastructure-as-a-service (IaaS) provider is responsible for the outage, IT organizations need to have plans in place to work around the outage in some way. Well-publicized outages over the past few years with Amazon Web Services and Microsoft Azure illustrate the problem. IT organizations may not know when the service provider will restore services and recover data so that business can return to normal. Careful selection of the location of cloud facilities, use of multiple availability zones or multiple service provider regions, as well as redundant network connectivity should be a part of any cloud decision.

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 success rates for the cost and service experiences and show how these trends differ by organization size and sector. We also discuss the elements that every disaster recovery plan should contain, and we review the major vendors in the disaster recovery outsourcing space.

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).