• United States

Connect downtime costs to SLM

Jan 22, 20033 mins
Data Center

* Participate in a study for connecting downtime costs with service levels

Past studies have quantified the cost of downtime of mission-critical business systems, generally segmented by industry. But while these studies are interesting (more than one study showing an average downtime of more than $1 million per hour has been used to justify IT expenditures!), they fail to define actual business impact more than anecdotally. What business managers need are quantified metrics that indicate just how much a given IT outage will cost a given business.

With that in mind, Enterprise Management Associates (EMA) is undertaking a study to apply actual downtime costs to service-level management (SLM) principles.

SLM is intended as a vehicle through which service providers or IT organizations give service-level guarantees (SLG) to the consumers of their services. SLGs are typically embedded in a service-level agreement (SLA), which says what, if any, penalties should be incurred if the SLGs are compromised, or what incentives are to be given if the SLGs are being met. An SLA without penalties or incentives is worthless.

Unfortunately, many service consumers do not possess the necessary technology to verify a) if their SLGs are in fact being met, b) if not, what penalties are due, and most importantly, c) what impact a compromised SLA has on their business.

It is well and good that a service provider is willing to refund service fees for failing to provide a guaranteed level of service, but these refunds pale in comparison to losses that a business may incur due to the failure. Today’s business managers must be proactive in assuring that the SLGs they have with service providers are being met, and they must have contingency plans that allow IT to quickly switch to an alternate provider if needs warrant.

To complete our research on this topic, we need your help. If you are a business manager, executive, or financial analyst responsible for mission-critical business systems in a Fortune 1,000 company, and are willing to participate in a brief survey and/or interview, we would like to hear from you. We keep all responses strictly confidential unless specific permission is granted to release the information, and we will sign non-disclosure agreements if necessary.

To participate in the study, please direct your Web browser to:

Participants in the study who provide an e-mail address will receive a complimentary copy of the research when it is published.

If you are interested in learning more about SLM, consider attending the Network World SLM Technology Tour featuring Rick Sturm, EMA’s CEO and founder. Sturm is co-author of the top-selling books, “Foundations of Service Level Management” and “SLM Solutions.” The tour is coming to New York; Chicago; Richardson, Texas; and San Francisco. You can register for this free event at or call 800-643-4668.