When it comes to protecting a business from unexpected disasters, having a robust and effective disaster recovery plan is crucial. However, disaster recovery solutions can also be quite costly, especially for larger enterprises with complex IT infrastructure and mission-critical data. In this article, we will examine some of the most expensive disaster recovery strategies and what makes them so costly.
Why is disaster recovery planning so expensive?
There are several factors that contribute to the high costs often associated with enterprise-grade disaster recovery plans:
- Advanced technology requirements – Solutions like active-active data centers, real-time data replication, and hot failover servers require expensive hardware and software.
- Scale – Larger companies with more data, users, and applications require more extensive solutions to match their operational scale.
- High availability – Minimizing downtime requires sophisticated redundancy across sites, networks, servers, and infrastructure.
- Compliance – Adhering to regulatory compliance for data protection and retention adds complexity and cost.
- Testing – Regular disaster recovery testing and drills are necessary but can be disruptive and expensive.
- Managed services – Outsourcing disaster recovery planning, testing, and execution to specialist providers is convenient but costly.
Ultimately, the goal is to reduce downtime as much as possible, and achieve rapid recovery time objectives (RTOs) and recovery point objectives (RPOs). The shorter the RTO and RPO targets, the more expensive the solution generally becomes.
Active-Active Data Center Strategy
One of the most robust and expensive disaster recovery configurations is an active-active setup with two synchronized data center sites located far apart geographically. This approach requires:
- Two data center facilities with full duplication of infrastructure – servers, networks, power, cooling, racks, firewalls etc.
- Data replication technology to synchronize data between sites in real-time.
- Load balancers and failover tools to redirect traffic and workloads with minimal interruption.
- High bandwidth, low latency dedicated connectivity between sites.
- Double the operational costs for staffing, maintenance, utilities etc.
The advantages of active-active include continuous availability, seamless failover between sites, and immediate disaster recovery with RTOs and RPOs of nearly zero. However, all this redundancy and synchronization leads to extremely high costs. Large enterprises may spend upwards of $5 million to $10 million or more for the initial setup, plus ongoing operational expenses in the millions per year.
Cost Considerations
Key cost factors for active-active data centers include:
| Item | Estimated Cost |
| 2x Data center facilities and infrastructure | $2 million – $5 million+ |
| Monitoring, maintenance, utilities for 2 sites | $500,000+ per year |
| Data replication licenses and hardware | $500,000+ startup |
| Extra bandwidth between data centers | $100,000+ per year |
| Professional services for setup | $500,000+ |
| Increased IT staffing requirements | $250,000+ per year |
These costs make active-active configurations most practical only for large enterprises with revenues over $1 billion where downtime costs would be catastrophic. The global investment bank Goldman Sachs reportedly invested $200 million for an active-active setup to ensure trading applications stay online during disasters.
Hot Standby Disaster Recovery Site
For most companies, an active-active setup may be unnecessary or too expensive. A more affordable disaster recovery approach is to have a hot standby (hot site) DR location. This involves:
- A secondary DR site with critical infrastructure ready to take over if needed.
- Regular backup replication from the primary site to the DR site, such as daily or hourly.
- Failover testing to ensure the DR site can successfully handle a transition.
- Optionally, a smaller number of backup servers that mirror production servers.
If a disaster occurs, the goal is to fail over critical applications to the hot site with minimal downtime. Having equipment already in place helps accelerate the transition. Costs are lower because only minimal staffing and compute resources are needed at the DR site under normal circumstances. There is also less data replication compared to active-active configurations.
Cost Considerations
Here are some of the main costs associated with a hot standby disaster recovery setup:
| Item | Estimated Cost |
| DR facility and infrastructure | $500,000 – $2 million+ |
| Replication software and backup | $100,000+ startup |
| Extra bandwidth for replication | $50,000+ per year |
| Servers for critical systems | $500,000+ |
| Regular DR testing | $100,000+ per year |
| Additional personnel | $250,000+ per year |
Total costs often amount to over $1 million up front, with ongoing operational expenses of several hundred thousand per year. The exact costs vary significantly based on the size of the organization, amount of infrastructure duplicated, and RTO/RPO targets.
Managed Disaster Recovery Services
Given the complexity and cost of managing disaster recovery internally, many organizations opt to outsource some or all of their DR planning to specialist providers. Some common managed DR services include:
- Hot/Cold DR site rental
- Backup and data replication
- Technical disaster recovery planning
- Failover testing and execution
- Emergency workspace recovery
Providers have extensive experience designing and implementing DR plans for a wide range of clients. They have access to alternate facilities, technology, and expertise that would be costly for an individual company to replicate internally.
Cost Considerations
Outsourcing can reduce capital expenditures, but managed services do come at a significant ongoing cost, including:
| Item | Estimated Cost |
| DR planning and consulting | $10,000+ per month |
| Hot/cold site rental | $5000+ per month |
| Backup and replication | $1000+ per TB per month |
| Failover testing services | $1000+ per test |
| Dedicated infrastructure | $2000+ per month per server |
| RTO / RPO contracting | Premium services for <2hr RTO, <15min RPO |
While leveraging managed services can minimize capital outlays, contractual costs at large providers can still amount to over $1 million per year for full-service disaster recovery support.
Cloud Disaster Recovery
Major public cloud providers like AWS, Azure, and Google Cloud offer robust disaster recovery capabilities that can be more flexible and affordable than traditional options:
- Built-in data replication across availability zones.
- Rapid provisioning of compute resources.
- Geographically diverse regions for resilience.
- Services like storage and databases designed for high availability.
- Pay-as-you-go model rather than large upfront costs.
Cloud DR can be implemented through cross-region replication, backup storage in multiple regions, and deploying hot failover instances. Costs scale dynamically based on actual usage rather than fixed hardware or capacity commitments.
Cost Considerations
Cloud disaster recovery costs will vary based on factors like:
| Usage Type | Cost Estimate |
| Data replication between regions | $100 – $200 per TB per month |
| Backup storage | $10 – $50 per TB per month |
| Cross-region bandwidth | $0.02 – $0.06 per GB |
| Compute instance failover capacity | $100+ per instance per month |
| Managed disaster recovery services | $5000+ per month |
Overall, cloud DR costs less than traditional disaster recovery for smaller deployments under 100 TB or so, but can still amount to over $1 million per year for large enterprises with enormous data volumes, traffic, and instance requirements.
Comparison of Costs
To summarize, here is an overview comparing the approximate costs for different disaster recovery configurations:
| DR Solution | Upfront Costs | Annual Ongoing Cost |
| Active-Active Data Centers | $5 million + | $2+ million |
| Hot Standby DR Site | $1+ million | $500,000+ |
| Managed DR Services | Minimal | $500,000+ |
| Cloud-based DR | Minimal | $200,000+ |
As these numbers demonstrate, robust disaster recovery capabilities require substantial technology investments and ongoing costs, especially for larger organizations. While DR planning is mission-critical, companies still need to conduct in-depth business impact assessments and risk analysis to right-size their DR approach based on their genuine RTO and RPO needs and recovery priorities.
Conclusion
The most expensive disaster recovery plans leverage fully redundant active-active data centers or managed hot sites with dedicated infrastructure capable of extremely rapid failover. However, for many companies these solutions are overkill. More affordable options like cloud disaster recovery can still meet business requirements for significantly lower costs. Organizations need to weigh the hard costs of different DR approaches against the potential soft costs of downtime and data loss if disasters occur. With thoughtful analysis, they can develop plans that balance robust protection with reasonable IT spend.
