How to Calculate the Cost of DRaaS for Your Business

To understand the return on investment (RoI) of Disaster Recovery as a Service (DRaaS), you first need to understand the cost of DRaaS. With that in mind, here is a comprehensive breakdown of DRaaS costs to help businesses calculate their budget requirements.

Factors that affect DRaaS costs

Understanding the factors that affect DRaaS costs enables businesses to choose a DRaaS solution with the right balance of performance and cost-effectiveness. Here are the 10 factors all businesses need to consider.

Data volume: The amount of data being protected directly affects costs. Larger data volumes require more storage, bandwidth, and processing power, which increases expenses.

Recovery Point Objective (RPO) and Recovery Time Objective (RTO): Lower RPO and RTO requirements demand more frequent data backups and faster recovery processes, which often necessitate premium services and higher costs.

Cloud storage costs: The type and tier of cloud storage chosen—such as standard, infrequent access, or archival—play a significant role. Higher-performance storage solutions are typically more expensive.

Compute resources: The virtual machines (VMs) and compute power needed during a disaster recovery event can significantly affect costs. This includes the number of VMs, CPU, and memory requirements.

Geographical redundancy: Storing data across multiple regions or locations for added redundancy increases costs due to additional infrastructure and data transfer requirements.

Service Level Agreements (SLAs): Enhanced SLA guarantees, such as 24/7 support or ultra-fast recovery times, often come at a premium.

Customizations and integrations: Tailored DRaaS solutions to meet specific business needs or integrate with existing IT environments may lead to higher setup and maintenance costs.

Testing and monitoring: Regular disaster recovery testing and continuous monitoring services, essential for ensuring reliability, add to the overall cost.

Regulatory compliance: Organizations in highly regulated industries might need specialized features, such as encryption or audit trails, which can increase costs.

Contract length: Committed contracts tend to offer lower DRaaS pricing than on-demand (pay-as-you-go) options. Similarly, longer contracts tend to offer more attractive DRaaS pricing than shorter ones.

How to estimate DRaaS pricing

One of the benefits of DRaaS is that DRaaS pricing contains few to no upfront costs. Businesses do, however, need to be clear about their ongoing costs. Here is a guide to calculating them.

Assess data volume: Start by determining the total amount of data that needs to be backed up and protected. Include structured and unstructured data, as well as any growth projections, to estimate storage requirements accurately.

Define RPO and RTO requirements: Establish the acceptable Recovery Point Objective (RPO) and Recovery Time Objective (RTO) for your organization. Stricter RPOs and RTOs often lead to higher costs due to the need for more frequent backups and faster recovery resources.

Evaluate cloud storage needs: Identify the type of cloud storage required (e.g., standard, infrequent access, or archival). Estimate costs based on the data storage tier and redundancy options, such as geo-replication or single-region storage.

Calculate compute resource needs: Determine the virtual machines (VMs), CPU, memory, and networking resources required for recovery operations. Include potential peak usage scenarios during a disaster.

Account for testing and monitoring: Factor in the cost of regular disaster recovery testing and ongoing monitoring services, which are critical to ensuring the reliability of the solution.

Include SLA and support options: Consider the cost of service level agreements (SLAs) for uptime guarantees, support responsiveness, and additional features like 24/7 assistance.

Incorporate compliance requirements: For regulated industries, include the cost of meeting compliance standards, such as encryption, audit trails, and data sovereignty.

Is DRaaS worth the investment?

Although DRaaS is highly popular for many solid reasons, it is not guaranteed to be the right solution for every business. Here are 7 points to consider when deciding if DRaaS is worth the investment for you.

Business continuity needs: Assess how critical it is for your business to maintain operations during a disruption. Industries like healthcare, finance, or e-commerce, where downtime can result in significant losses, often benefit most from DRaaS.

Cost of downtime: Calculate the potential financial impact of downtime, including lost revenue, productivity, and reputational damage. If these costs exceed the DRaaS investment, the solution may be worthwhile.

Current IT resources: Evaluate your existing IT infrastructure and expertise. Businesses without a dedicated IT disaster recovery team or hardware often find DRaaS more cost-effective than building and maintaining an in-house solution.

Recovery objectives: Determine your Recovery Point Objective (RPO) and Recovery Time Objective (RTO). DRaaS is particularly valuable for organizations requiring fast recovery and minimal data loss.

Compliance requirements: For industries with strict regulatory standards, DRaaS providers offering compliance-ready solutions can save time and reduce risks.

Scalability: Consider future growth. DRaaS solutions offer scalability that accommodates changing business needs without significant upfront investments.

Integration with existing systems: Consider whether DRaaS can seamlessly integrate with your existing IT infrastructure and workflows. If the service aligns well with your current systems, it can reduce the complexity of disaster recovery operations.