Nutanix Reduces Risk Valuation Costs

September 18, 2017 tjmccallum97 53d Comments

“5,200 customer care representatives reverting to paper processes… now, we have to pay them overtime to finish their work.”

“1,200 stores were unable to sell products for 2 hours.”

“Our customers couldn’t access our website.”

While employed as an Enterprise Storage Manager in 2007, these were the statements I heard following a 20 minute storage outage impacting business critical applications. As the business costs tumbled into 8 digits, I remember vividly thinking; “We had it back up in 20 minutes. How can it cost this much?” Outages hurt.

The core problem wasn’t that we did anything wrong; it was the way we viewed risk in our IT infrastructure. IT organizations, as was the case with our team, tend to attribute one risk level to all layers of the IT stack. This is commonly known as 9’s. Each 9 represents a decimal position of single year risk percentage. For example five 9’s equates to 99.999% uptime of the system.

As IT increasingly layers systems atop one another, each with the ability to bring the supported applications out of service, it becomes subject to an increasing statistical risk to the business application with each layer. This is known as cumulative risk. IT can quickly turn a five 9’s infrastructure into only four or even three 9’s while continuing to believe the infrastructure is still at the original five 9’s. Four 9’s equates to nearly 53 minutes of annual downtime risk per year vs. of about 5 minutes with five 9’s; a tenfold increase in application unavailability risk.

To compound the IT infrastructure risk challenge, virtualization of business applications is making the stakes higher and outages less tolerable. In fact, the hypervisor itself, necessary to enable virtualization, is quickly becoming fully integrated into the underlying technology. Non-integrated third party providers of hypervisors are increasingly being seen as a fourth software tier contributing to the risk equation.

Cumulative IT infrastructure risk is no longer acceptable. Nutanix understands the importance of minimizing cumulative risk as part of the next generation of IT infrastructure. Through the abstraction of software-defined infrastructure, Nutanix enables self-healing and software orchestration in an industry accustomed to fail-over systems, redundancy and manual patching & upgrades.

In August 2015, IDC analyzed 13 Nutanix customers. IDC found that these customers experienced a 98% reduction in unplanned downtime. While a staggering statistic, in conversations with several people in the IT industry, I have found that many fail to see this finding as anything more than another glossed over percentage. IT often fails to see the significance of this number for the business. Let’s quantify the impact of this finding using an example use case.

Emerson Network Power sets the benchmark for the cost of data center outages. Its most recent analysis of 49 separate organizations representing 63 data centers found that the average unplanned partial outage (i.e. infrastructure) costs business $7,809 per minute and lasts for 64 minutes.

So, how does a 98% reduction of unplanned downtime and cumulative risk impact the Emerson Network Power findings?

Use case:

Assuming a 4-tier five 9’s infrastructure3rd party hypervisor (software tier)
Virtualized server cluster farm
Storage area network
Storage arrays
Operating infrastructure for 5 years
Nutanix reduces unplanned downtime 98%

Scenario 1: 4-tier infrastructure

Total downtime = (100%-((five 9′ s)^(4 tiers+5 years) ) * (60 minutes per hour* 24 hours per day * 365 days per year * 5 years)

237 minutes = (100%-99.991%) * 2,628,000 minutes

$1,850,733 total risk valuation = 237 minutes unplanned downtime * $7,809

Scenario 2: Nutanix

Total downtime = (100%-((five 9′ s)^(5 years) ) * (60 minutes per hour * 24 hours per day * 365 days per year * 5 years)

3 minutes = (100%-99.994%) * 2,628,000 minutes * 98% IDC reduction in unplanned downtime

$23,427 total risk valuation=3 minutes unplanned downtime * $7,809

Nutanix reduces costly risk valuations by $1,827,306 over 5 years over the 4-tier infrastructure alternative.

Of course, understanding risk valuation using statistics, mathematics and benchmarks may not give you much comfort in the room with your company’s business leaders following an unplanned outage, but with Nutanix, hopefully you will never need face such a scenario.