Most businesses don’t think twice about taking out insurance policies to protect against various forms of loss, such as workers compensation or public liability. They’re rightly considered a cost of doing business. But what about the cost of downtime? If your website or application is a critical part of your business, you should be taking every precaution to guard against outages in the same way you insure yourself against other forms of loss.
The most serious business consequences of downtime are often lost customer registrations, lost sales or frustrated customers. In 2015, one of Anchor’s larger e-commerce customers transacted more than $100 million dollars in revenue through their Magento store. Crunching those numbers means a single hour of downtime equals a potential revenue loss of around $11,415.
In reality, the loss could be far worse as outages tend to strike during your busiest times, such as a major sale or expensive campaign promotion. So, the real cost could be four or five times your ‘business as usual’ number. Add to that the reputational damage to your brand and the financial impacts keep growing. Fortunately, every cloud provider offers some form of Service Level Agreement (SLA), including an uptime guarantee, and AWS is no different. SLAs and guarantees set out to give us confidence in the resilience of the network, infrastructure and services while describing how we may be compensated should an unscheduled outage occur.
But do you understand how the Amazon Web Service’s (AWS) SLA and uptime guarantee work in practice? You may be surprised to learn that any compensation you might receive may be far, far less than your lost business revenue. There are a couple of reasons for this:
- Even a 99.5% uptime guarantee means your website or app can be offline for nearly 22 minutes each and every month without compensation—and that can add up to a lot of lost sales.
- Compensation is in the form of service credit, capped at 10% of the monthly bill (although this increases to 30% capped if uptime is lower than 99.0%).
Relying on a cloud provider’s uptime guarantee is never an alternative to taking the necessary steps to ensure your deployment is highly available. It’s worth investing a little more to protect your bottom line.
Oh, and it’s entirely possible (even likely!) that you may have already voided any SLA protections…
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