Optimal IT Service Availability: Shorter Outages, or Fewer?

High enterprise IT service availability is a key success factor throughout many industries. While understanding of the economic importance of availability management is becoming more widespread, the implications for management of Service Level Agreements (SLAs) and thinking about availability risk management are just beginning to unfold. This paper offers a framework within which to think about availability management, highlighting the importance of variance of outage costs. The importance of variance is demonstrated using simulations on existing data sets of revenue data. An important implication is that when outage costs are proportional to outage duration, more but shorter outages should be preferred to fewer but longer, in order to minimize variance. Furthermore, two archetypal cases where the cost of an outage depends non-linearly on its duration are considered. An optimal outage length is derived, and some guidance is also given for its application when the variance of hourly downtime costs is considered. The paper is concluded with a discussion about the feasibility of the method, its practitioner relevance and its implications for SLA management.