How to understand DRaaS pricing and budgeting

This post was originally posted on TechTarget.

Making the decision to move to a disaster-recovery-as-a-service provider is relatively easy, but then comes the hard part: understanding how to accurately price and budget the service.

Before considering any particular disaster recovery as a service (DRaaS), it’s important to conduct a business impact analysis (BIA). “It’s vital for companies to understand their mission-critical business processes, the prioritization of systems and the timeframe for restoration of processes after a disruption,” said Gina Yacone, a cybersecurity consultant with Agio, a managed IT and cybersecurity services firm.

Developing a carefully thought out BIA demands a significant amount of work, yet will pave the way for a budget offering business leaders various investment scenarios. “The development of a disaster recovery budget roadmap is a complex task that requires a finance- and technology-savvy team,” Yacone said. “Without a budget, a company will be forced to re-justify every IT expenditure that arises after a disaster, which may make for significant unnecessary overhead.”

Evaluating pricing

DRaaS pricing is a twofold operation. The first step is based on the number of servers, VMs and/or applications that need protection, according to Craig Tavares, head of cloud at managed hosting provider Aptum. “The second layer centers on how aggressive restore time objectives and restore point objectives need to be,” he said.

Ed Fox, CTO of data and network services firm MetTel, recommended developing a clear understanding of critical applications and grouping them into mission-critical, nice-to-haves and minimal-effect categories. “You would be surprised how many companies really don’t have an internal agreement on these points,” he said.

With a clear consensus and a plan in hand, pricing should be reviewed between various DRaaS providers. “The most critical factors will be the current underlying technologies being used in production, such as VM, AIX and Hyper-V,” Fox said.

Although DRaaS pricing is generally based on the number of servers, VMs or applications that will be included in the DR plan, there’s another important factor to consider. “DRaaS can range from simple back-ups offsite all the way to automated failover in distinct geographic locations, so there is no simple one-size-fits-all approach to pricing,” said Mark Damm, CTO of FuseForward, a firm that provides secure IT environments for critical infrastructure providers running critical application workloads in the cloud.

Budgeting considerations

When planning a DRaaS budget, understand your organization’s recovery time objective (RTO) and recovery point objective (RPO) requirements. “To determine how much to budget for RTO and RPO, you’ll need consider the cost of potential downtime to your business,” Damm said. “For example, if you are considering disaster recovery for a service that drives revenue, you must take the cost of potential lost revenue into consideration.” In this case, the amount of revenue you stand to lose will ultimately determine how much budget you want to invest in your RTO, he noted.

Damm stressed that it’s important to budget for more than just the DRaaS service itself. “You should include all of the costs associated with a disaster recovery solution, including hardware infrastructure, bandwidth, DR software and managed services,” he said.

Avoiding pitfalls

A critical mistake many organizations make is committing to a particular DRaaS provider without first developing a comprehensive business continuity plan. “A disaster recovery service alone is not enough without processes that outline how the organization should continue working in the case of a disaster,” Damm said. “For example, a disaster could take out your on-premises services, along with the office itself.” Were such an event to occur, a DR service might bring applications back online as expected, but employees might be left with no way to access these applications outside of the office.

The final business continuity plan needs to be circulated through the organization to reach a consensus on priorities. “This means knowing the right questions to ask internally,” Tavares said. “You can also assume a DRaaS will cost 20 to 30% more than your standard backup solution but will provide operational efficiencies through automation in the long term, along with peace of mind.”

A budget pitfall is also likely to occur when a disaster recovery plan fails to account for different types of events. All scenarios aren’t equal, and businesses must consider the likelihood of the type and severity of each possible disaster situation. “Without providing business leaders with enough information, the burden falls to decision-makers when the disaster is happening, thereby, economically hurting the company,” Yacone said.

Another common DRaaS budgeting mistake is relying on the same DR strategy every year. Plans should be revisited and updated, if necessary, at least every 12 months.