Step 4: Justifying the Cost of a Selected High Availability Solution
If money doesn’t grow on trees in your organization or if the cost of downtime isn’t a huge dollar amount per hour, it might be necessary for you to justify the cost of a high availability solution that you are about to build. If yours is like most other organizations, any new change to a system or an application must be evaluated on its value to the organization, and a calculation of how soon it will pay for itself must be done. ROI calculations provide the cost justification behind a proposed solution.
As stated earlier, ROI can be calculated by adding up the incremental costs (or estimates) of the new HA solution and comparing them against the complete cost of downtime for a period of time (such as 1 year). This section uses the ASP business from Scenario 1 as the basis for a ROI calculation. Recall that for this scenario, the costs are estimated to be between $100k and $250k and include the following:
Five new multi-core servers with 64GB RAM at $30k per server
Five Microsoft Windows 2012 Server licenses
Five shared SCSI disk systems with RAID 10 (50 drives)
Five days of additional training costs for personnel
Five SQL Server Enterprise Edition licenses
These are the incremental costs:
Maintenance cost (for a 1-year period):
$20k (estimate)—System admin personnel cost (additional time for training of these personnel)
$35k (estimate)—Software licensing cost (of additional HA components)
$100k hardware cost—The cost of additional HW in the new HA solution
$20k deployment cost—The costs for development, testing, QA, and production implementation of the solution
$10k HA assessment cost—Be bold and go ahead and throw the cost of the assessment into this estimate to get a complete ROI calculation
Downtime cost (for a 1-year period):
If you kept track of last year’s downtime record, use that number; otherwise, produce an estimate of planned and unplanned downtime for this calculation. For this scenario, the estimated cost of downtime/hour is be $15k/hour.
Planned downtime cost (revenue loss cost) = Planned downtime hours × cost of hourly downtime to the company:
a. 0.25% × 8,760 hours in a year = 21.9 hours of planned downtime
b. 21.9 hours × $15k/hr = $328,500/year cost of planned downtime.
Unplanned downtime cost (revenue loss cost) = Unplanned downtime hours × cost of hourly downtime to the company:
a. 0.25% × 8,760 hours in a year = 21.9 hours of unplanned downtime
b. 21.9 hours × $15k/hr = $328,500/year cost of unplanned downtime.
Total of the incremental costs = $185,000 (for the year)
Total of downtime cost = $657,000 (for the year)
The incremental cost is 0.28 of the downtime cost for 1 year. In other words, the investment of the HA solution will pay for itself in 0.28 year, or 3.4 months!
In reality, most companies will have achieved the ROI within 6 to 9 months.
Adding HA Elements to Your Development Methodology
Most of the high availability elements identified in the Phase 0 HA assessment process and the primary variables gauge can be cleanly added (extended) to your company’s current system development life cycle. By adding the HA-oriented elements to your standard development methodology, you ensure that this information is captured and can readily target new applications to the correct technology solution. Figure 3.17 highlights the high availability tasks that could be added to a typical waterfall development methodology. As you can see, HA starts from early on in the assessment phase and is present all the way through the implementation phase. Think of this as extending your development capability. It truly guarantees that all your applications are properly evaluated and designed against their high availability needs, if they have any.