Once a company realizes that weather, a blackout, or a virus could shut down operations at any time, it's time to measure how long the business could be down before financial consequences are calamitous.
The Royal Bank Of Canada serves its top customers from a division in hurricane-prone Florida. RBC assessed the risks faced by the division and calculated that the Florida operation could be inactive for two hours before incurring millions of dollars in losses per hour.
So this coming year, RBC will create a mirrored data center 60 miles from the original center. The failover center will continually replicate data and take over if worse comes to worst. The bank hired Gulfcoast, a subsidiary of IT-portfolio-management firm Relational Funding Corp., to help make the strategy and technology choices.
Execs decided that the second data center had to be within driving distance, but also had to be somewhere that didn't normally experience the same weather patterns as the primary data center.
The driving distance part of the equation was important to ensure that employees would be able to make it to the center. "The bank looked at stats from Hurricane Andrew, showing 70% of those who were supposed to move to alternate locations were not willing to go" during such an event, says John Medaska, VP of business development at Gulfcoast. "If the house is destroyed and your wife and children are now homeless, you won't leave them."
Medaska says the bank saved a ton of money by buying refurbished systems for the secondary center. For example, RBC paid $36,000 for a used IBM iSeries server that would have cost almost three times as much new. More importantly, and surprisingly, the bank expects to save money operating the second data center on its own over using a third-party disaster-recovery service from IBM or SunGard.
"The bank expects savings of 10% to 12% over SunGard for the 36 months of the contract," Medaska says. He says that at the three-year mark, the bank's costs for infrastructure and personnel to operate the center should be less than what SunGard had proposed when the bank approached it about a possible contract.