Modern Database Management: Chapter 11 Problem and Exercise 13

Question

An e-business operates a high-volume catalog sales center. Through the use of clustered servers and mirrored disk drives, the data center has been able to achieve data availability of 99.9 percent. Although this exceeds industry norms, the organization still receives periodic customer complaints that the Web site is unavailable (due to data outages). A vendor has proposed several software upgrades as well as expanded disk capacity to improve data availability. The cost of these proposed improvements would be about $25,000 per month. The vendor estimates that the improvements should improve availability to 99.99 percent.

a. If this company is typical for a catalog sales center, what is the current annual cost of system unavailability? (You will need to refer to Tables 11-2 and 11-3 to answer this question.)

b. If the vendor’s estimates are accurate, can the organization justify the additional expenditure?

Answer

Consider the following values:

Data availability at the data center of an e-business is 99.9%

Now, from table 11-2 given in the book, the average cost per hour of downtime of a catalog sales center is $90,000.

Also, from table 11-3 given in the book, a system with 99.9%data availability is down for 8.77 hours per year. 

Calculate the annual cost of downtime.

= Cost per hour  x  number of hours down

= 90,000 x 8.77

= 789300

Hence, the annual cost of system unavailability before improvement is $789,300.

Consider the following values:

Proposed cost of improvement with software upgrades and expanded disk capacity is $25,000 per month

Data availability at the data center after improvement is 99.99%

Again, from table 11-3 given in the book, a system with 99.99% data availability is down for 0.88 hours per year.

The cost of downtime after improvement is calculated below:

= cost per hour  x  number of hours down

= 90,000 x 0.88

= 79200

From step (a) above cost before improvement was $789,300. So, the savings after improvement:

= 789300 - 79200

= 710100

Now, the cost of improvement:

= $25000 per month x 2

= $300,000 per year

So, the savings for company are:

= earlier savings - cost

= 710,100 - 300.000

= 410,100

The company will save $410,100 after spending money on improvements. So, the additional expenditure for improvements is still justifiable.