Over One Third of SMBs Willing to Risk a 40% Revenue Hit Due to Their Inability to Recover from a Disaster
Three (3) months ago Symantec published the results of its SMB Disaster Preparedness Survey that shared what nearly 1,700 small and midsize companies worldwide had to say about disaster recovery (DR). While the results of this report were mentioned by a number of publications (Continuity Central, eWeek, IT Business Edge and Techworld just to name a few), there were a couple other nuggets of information included in this survey that these articles either glossed over or simply failed to mention.
Those of you have not read this report, I recommend you do so. It is only nine (9) pages long, a fairly quick read and can be accessed at Symantec's website at this link without requiring any form of registration. However in doing a review and study of this report and then comparing it to what is already published, two pieces of information included in this report were not covered in depth but merited further examination.
The first is how well SMBs are protecting virtualized server environments which the report itself did not mention but can be found on slide 10 of a PowerPoint that Symantec released in conjunction with this survey. Specifically, Applied Research (which conducted the survey) found that over one third (36%) of SMBs do not backup their virtual environments. This percentage of unprotected virtualized servers in SMBs coincides with about the same number of enterprise organizations (35%) that do not protect their virtual servers which Symantec found in a previous 2008 survey.
Yet what neither of these surveys establishes is exactly why so many virtualized servers in both enterprises and SMBs go unprotected.
One possibility is that it may reflect the method of how server virtualization is finding its way into these companies. Rather than coming in as part of their normal IT processes, server virtualization is being introduced and managed by administrators that are not under the direct supervision of that organization's main IT management. This is resulting in server virtualization islands that are not adopting corporate standards of data protection and even failing to consider the importance of data protection as part of their overall server virtualization plan.
Another possibility is that server virtualization is still being used primarily for applications in test and development. Used in this way, organizations may not see the need to protect and recover the data on these virtualized servers as part of their overall data protection strategy.
A third possibility may be that these organizations have found legacy backup techniques unsatisfactory and have not yet identified and implemented a suitable replacement for the protection and recovery of these virtualized servers. Hopefully future surveys will vet out why so many SMB and enterprise organization chose to forego the protection and recovery of their virtualized servers.
The other piece of information that was not widely picked up was the willingness of SMB vendors to lose over one third of their customers and the willingness of customers to change SMB vendors. What struck me in this report was the level of correlation between what SMB vendors thought that their customers would do if they were affected by a disaster and what their customers actually did when their SMB vendors were struck by a disaster.
Specifically, SMBs vendors thought that 38% of their customers would evaluate and go with another SMB vendor if they experienced a disaster. This aligns pretty well with customers actually did. 39% of them reported that they actually did make the switch to another SMB vendor when their current SMB vendor experienced a disaster and could not come back online in a timely manner.
Knowing this percentage answers an historically tough question that SMB vendors could not previously quantify: "What percentage of their business are they putting at risk by not having a DR solution in place?"
Most SMBs instinctively know a certain percentage of their customers will extend goodwill to them should they experience a disaster and need to recover their business. But exactly what percentage of their customers will extend that goodwill has always been at best a guess. Now they have a hard number to work with: 39% of their current customers will abandon them if they are affected by a disaster.
This number is helpful to an SMB establishing a budget for DR. For the sake of simplicity, if an SMB is doing $500,000 a year in revenue and it experiences a disaster, it can expect to immediately loose $200,000 in revenue at the worst possible time. Now not only is it trying to rebuild operations as a result of the disaster, it must also deal with the cash flow crunch from the loss of revenue and the extra workload that comes from nearly 40% of their customers bailing out on them at that same time. Viewed in that context, SMBs can establish budgets and look to justify expenditures on an appropriate DR solution that can help ensure this $200,000 worth of revenue keeps flowing should a disaster strike.
Two aspects of data protection that many SMBs still do not have under control are protecting data on virtualized servers and establishing how much to spend on a DR solution. While the SMB Disaster Preparedness Survey only highlights that the protection of virtualized servers remains a problem, it did reveal that SMBs can realistically expect a 40% hit in revenue should a disaster strike. This statistic provides some valuable insight into how a disaster would impact their business that they can use as part of the justification of the purchase of an appropriate DR solution for their business.
Those of you have not read this report, I recommend you do so. It is only nine (9) pages long, a fairly quick read and can be accessed at Symantec's website at this link without requiring any form of registration. However in doing a review and study of this report and then comparing it to what is already published, two pieces of information included in this report were not covered in depth but merited further examination.
The first is how well SMBs are protecting virtualized server environments which the report itself did not mention but can be found on slide 10 of a PowerPoint that Symantec released in conjunction with this survey. Specifically, Applied Research (which conducted the survey) found that over one third (36%) of SMBs do not backup their virtual environments. This percentage of unprotected virtualized servers in SMBs coincides with about the same number of enterprise organizations (35%) that do not protect their virtual servers which Symantec found in a previous 2008 survey.
Yet what neither of these surveys establishes is exactly why so many virtualized servers in both enterprises and SMBs go unprotected.
One possibility is that it may reflect the method of how server virtualization is finding its way into these companies. Rather than coming in as part of their normal IT processes, server virtualization is being introduced and managed by administrators that are not under the direct supervision of that organization's main IT management. This is resulting in server virtualization islands that are not adopting corporate standards of data protection and even failing to consider the importance of data protection as part of their overall server virtualization plan.
Another possibility is that server virtualization is still being used primarily for applications in test and development. Used in this way, organizations may not see the need to protect and recover the data on these virtualized servers as part of their overall data protection strategy.
A third possibility may be that these organizations have found legacy backup techniques unsatisfactory and have not yet identified and implemented a suitable replacement for the protection and recovery of these virtualized servers. Hopefully future surveys will vet out why so many SMB and enterprise organization chose to forego the protection and recovery of their virtualized servers.
The other piece of information that was not widely picked up was the willingness of SMB vendors to lose over one third of their customers and the willingness of customers to change SMB vendors. What struck me in this report was the level of correlation between what SMB vendors thought that their customers would do if they were affected by a disaster and what their customers actually did when their SMB vendors were struck by a disaster.
Specifically, SMBs vendors thought that 38% of their customers would evaluate and go with another SMB vendor if they experienced a disaster. This aligns pretty well with customers actually did. 39% of them reported that they actually did make the switch to another SMB vendor when their current SMB vendor experienced a disaster and could not come back online in a timely manner.
Knowing this percentage answers an historically tough question that SMB vendors could not previously quantify: "What percentage of their business are they putting at risk by not having a DR solution in place?"
Most SMBs instinctively know a certain percentage of their customers will extend goodwill to them should they experience a disaster and need to recover their business. But exactly what percentage of their customers will extend that goodwill has always been at best a guess. Now they have a hard number to work with: 39% of their current customers will abandon them if they are affected by a disaster.
This number is helpful to an SMB establishing a budget for DR. For the sake of simplicity, if an SMB is doing $500,000 a year in revenue and it experiences a disaster, it can expect to immediately loose $200,000 in revenue at the worst possible time. Now not only is it trying to rebuild operations as a result of the disaster, it must also deal with the cash flow crunch from the loss of revenue and the extra workload that comes from nearly 40% of their customers bailing out on them at that same time. Viewed in that context, SMBs can establish budgets and look to justify expenditures on an appropriate DR solution that can help ensure this $200,000 worth of revenue keeps flowing should a disaster strike.
Two aspects of data protection that many SMBs still do not have under control are protecting data on virtualized servers and establishing how much to spend on a DR solution. While the SMB Disaster Preparedness Survey only highlights that the protection of virtualized servers remains a problem, it did reveal that SMBs can realistically expect a 40% hit in revenue should a disaster strike. This statistic provides some valuable insight into how a disaster would impact their business that they can use as part of the justification of the purchase of an appropriate DR solution for their business.
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