What does natural disaster mean to the DR-as-a-Service market?

Human kind has always been a silent observer of natural disasters creating havoc worldwide. Be it the earthquakes of Japan, China and Indonesia or the hurricanes of US and Canada; we as human beings have always felt helpless. This is no different for great companies dealing with customer data and business secrets. They understand the importance of having a DR system (read as disaster recovery plan) in place but IT managers often dis-agree to say that they don’t provide enough ROI on investments. And why not? Fires, floods or earthquakes don’t happen every day; so what’s the need of spending thousands of dollars in a system where you don’t even know whether it would ever be useful?

And this is where Disaster Recovery-as-a-Service comes in the scenario.

The recent hurricanes in US, typhoons in Philippines, earthquakes in Indonesia and floods in China has increased awareness among companies going for cloud based DR. The natural calamities have washed away corporate offices, data-centers, systems and every computer equipment possible. As per one of the surveys conducted by Polygon Group in US suggest:

  • Around  30% of the businesses are affected by natural disasters every year
  • 25% of the companies don’t reopen following a disaster
  • 75% of the companies without a DR plan fail within 3 years of a disaster

Reports advocate that financial loss caused due to Katrina and Sandy (both US hurricanes) were massive and ranged up-to USD 108 bn. and USD 82 bn. respectively. This number would surprisingly go high provided we calibrate every possible natural emergency involved in a year.

Needless to say, these un-toward catastrophes have made higher customer awareness in the recent past. DRaaS providers have observed higher number of customer enquiries since 2012, a major chunk of the pie from small and medium enterprises. With their constrained IT budgets the SMBs have managed to allocate financial resources towards disaster recovery. The basic benefits of cloud computing has very well benefited smaller companies to think DRP. Moreover, DRaaS provides remote access, better scalability, expert support and access to the best DR tools available at minimal cost.

One more benefit that has churned out from this is the creation of jobs. Recruitment specialists believe that cloud computing is currently the most valuable IT job skill that is expected to persist in the market till the next few years, DRaaS contributing significantly.

But everything is not rosy-cozy. Customer awareness is still very low and stands a challenge for the success of this “as-a-service” technology. Users consider, having a storage system in place is like having a disaster recovery plan. This myth needs to be better addressed before it is too late to attend.

The current market for Recovery-as-a-Service is still immature but possesses higher growth potential. ResearchFox Consulting estimates that DRaaS stands at USD 1.35 bn. and is expected to growth at CAGR 25.59% till 2017. A lot of start-ups have emerged in the market over the last three years along with established players looking to invest as well. We believe growing market opportunities coupled with better customer attention would further push this much deeper.

Image courtesy of Stuart Miles /

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