The SMB Disaster Recovery ROI Myth

The data processing industry regularly laments the abysmally low adoption rate for Disaster Recovery among SMBs. We have all seen the figures that most SMBs who lose their data are pretty much guaranteed to go out of business in five (5) years. That may be true but it obscures the fact that historically most offsite data protection solutions have been ridiculously expensive and to date the ROI has been so poor it made no sense to spend precious cash to offset such a low probability occurrence.

So the “myth” in this case is that SMBs have made bad decisions when in fact, based on the numbers alone, they correctly sensed that it was not yet time to invest in offsite backup until just recently with the advent in cloud computing / cloud backup. Just imagine if you will that the fear uncertainty and doubt (FUD) gang had convinced every single small business to stand up an offsite position. That would have represented billions, possibly trillions, of wasted investment.

For instance, if a typical small business had somehow managed to “replicate their production environment” at a remote site or with a service provider five (5) years ago they would now be stuck with, essentially, boat anchors. Unless they experienced a major outage during that period then they never benefited from the tens of thousands of dollars spent. Too many of those kinds of expenditures and you will definitely go out of business.

SMBs are street smart and they can tell when something is in their best interest and when it is a good time to invest. With the advent of hypervisors and cloud computing the ROI on cloud backup is finally moving into an appropriate range. For instance, if there is a 2% chance your business location will be compromised in a given year then you can easily justify spending at least 2% of your profit on an alternate “data position”. So $100K annual profit suggests break even for a $2K annual investment at which point the ROI is finally on your side.

Also, keep in mind that ROI calculations for disaster recovery are separate from those for a local backup. This means that if you figure there is a 2% chance that you will delete a file that you want back in the coming year (what are the chances) then that is an additional 2% ROI for data protection on top of the 2% chance your physical plant will be compromised.

Ideally you will deploy a single solution with linear costs and exponential benefits so you can dramatically improve survivability simply by adding more of the exact same kind of Nodes that you run locally into your cloud backup network. Moreover the costs with cloud computing are now so attractive that it actually makes sense to deploy your own software into your public cloud computer cluster rather than isolating your backup data in complete separate hosted position.

This just keeps the ROI layering going when you deploy a cloud backup Node within your community of cloud computers on the same virtual subnet because it adds points for competitive advantage. Some examples of this include managed file transfer and content delivery which can easily add another 1% to 3% to your ROI calculation making the investment really easy to justify.

In other words, now is a great time, finally, to ensure your organization is both hard to kill and hard to beat.

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