The Cost Benefits of DRaaS for Enterprises

Before making any business decision, it’s always advisable to make a cost-benefit analysis. This is particularly true at enterprise level where mistakes can not only be costly but also extremely difficult to reverse. With that in mind, here is a straightforward guide to the cost benefits of DRaaS (Disaster Recovery as a Service).

Understanding the costs of traditional disaster recovery

Traditional disaster recovery (DR) often involves significant upfront and ongoing costs. These include investments in dedicated hardware, such as backup servers and storage, as well as software for backup and recovery management.

Additionally, businesses must maintain secondary data centers. These incur costs for power, cooling, and physical security. There are also staffing costs for managing and monitoring DR systems. Furthermore, regular testing and compliance with disaster recovery plans add to operational expenses.

These combined costs make traditional DR solutions expensive, particularly for businesses without the infrastructure or resources to support them effectively.

DRaaS as a cost-effective solution

With Disaster Recovery as a Service (DRaaS), businesses can leverage cloud-based infrastructure to replicate and store data.

This eliminates the need for redundant infrastructure such as dedicated hardware and secondary data centers. It therefore minimizes the need for capital expenditure.

Additionally, DRaaS providers handle system management, updates, and recovery testing. This reduces operational overhead. It therefore reduces or even eliminates the need for expensive in-house staffing.

Moreover, DRaaS providers typically use consumption-based pricing models. This means organizations only pay for the resources they use. By extension, it also means businesses can easily scale their use of DRaaS.

How DRaaS reduces the need for on-site infrastructure

DRaaS reduces the need for on-site infrastructure by shifting disaster recovery processes to the cloud.

Instead of investing in and maintaining physical servers, storage, and backup hardware at a secondary site, businesses can leverage a cloud provider’s infrastructure for data replication and recovery.

This eliminates the costs of purchasing, housing, powering, and securing on-site disaster recovery systems.

Additionally, the DRaaS provider manages and maintains the recovery environment. This reduces the pressure on in-house staff.

The financial impact of faster recovery times

Here are just 7 examples of the financial impact of faster recovery times.

Increases operational efficiency: Reduces wasted resources and productivity losses tied to downtime.
Reduces labor costs: Shorter downtime means less spending on overtime, emergency IT support, and recovery efforts.
Avoids compliance penalties: Ensures adherence to regulations, preventing fines and legal costs.
Prevents contractual penalties: Meets service level agreements (SLAs) to avoid breach-related financial losses.
Minimizes revenue loss: Faster recovery prevents lost sales and missed transactions.
Lowers customer churn: Faster recovery retains customers, preventing long-term revenue loss.
Protects brand reputation: Avoids costly PR damage control and loss of investor confidence.

Calculating the ROI of DRaaS

These are the 7 key steps to follow when calculating the ROI of DRaaS.

Identify costs of traditional disaster recovery: Include infrastructure, staffing, maintenance, and testing costs.

Calculate DRaaS subscription fees: Account for the ongoing costs of the DRaaS provider.
Estimate downtime costs: Consider lost revenue, productivity, and customer dissatisfaction due to outages.
Measure recovery time improvements: Quantify the reduction in downtime and its impact on the business.
Factor in operational efficiencies: Account for reduced management overhead and resource utilization.
Compare savings: Subtract the DRaaS costs from traditional recovery expenses and assess the net benefits.
Calculate ROI: Divide net savings by DRaaS investment and multiply by 100 to get the ROI percentage.

Cost-benefit analysis: DRaaS vs traditional solutions

Here are the five key factors to consider when conducting a cost-benefit analysis between DRaaS and traditional disaster recovery solutions.

Initial and ongoing costs: Compare setup, hardware, software, and maintenance expenses for both solutions. Evaluate how each option can scale in line with your business needs.

Recovery time and point objectives (RTO and RPO): Assess how quickly systems can be restored and data recovered in both scenarios.

Downtime costs: Quantify the impact of downtime on revenue, productivity, and customer satisfaction.

Compliance and security: Factor in the ability to meet regulatory requirements and ensure data protection.

Management overhead: Compare the staffing and resources needed for each solution.

Case studies: enterprises saving with DRaaS

These are three case studies in enterprises saving with DRaaS.

Retail chain: A large retail chain switched to DRaaS, reducing its disaster recovery infrastructure costs by 50%. With the cloud-based solution, recovery times were reduced from several hours to under 30 minutes, minimizing downtime during critical sales periods and preventing revenue loss.

Financial institution: A bank adopted DRaaS to meet stringent compliance requirements. By eliminating on-site hardware and using a pay-as-you-go model, they saved 40% on infrastructure costs while improving recovery time and ensuring continuous service during outages.

Healthcare provider: A healthcare provider reduced recovery times and IT staff workload with DRaaS. The cost savings from eliminating physical backup systems and managing cloud-based recovery led to a 30% reduction in overall disaster recovery expenses.