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What exactly happens during a cloud outage and why should business owners care?

The danger of your business suffering a cloud outage — which can halt your operations and prevent critical files from being backed up — is very real and can severely affect your business.

As a business owner, you probably rely heavily on cloud services. If you’re keeping data outside of your network, then you’re using cloud storage. If you’re subscribed to productivity suites such as Microsoft Office 365, then you’re using cloud-based software instead of software installed in your hard drive to get work done.

Cloud services providers leverage huge economies of scale so that small- to medium-sized businesses (SMBs) can enjoy enterprise-level IT infrastructure at a fraction of the cost. What happens to data during cloud outages? — it can’t go anywhere, so websites won’t load, inventory management services can’t be accessed, or online financial services can’t fulfill transactions. Basically, cloud outages mean downtime, which is never a good time for anybody.

What causes cloud outages?

Many things can disrupt cloud services. IT technicians can commit errors during server maintenance procedures or systems updates. Natural disasters such as earthquakes can devastate physical IT infrastructure. And of course, hackers can attack data centers to steal sensitive information.

Even if your service-level agreement (SLA) with a cloud services provider comes with a downtime compensation package, failing to serve customers on-demand will have them switching to your competitors. It’s therefore extremely important to prevent costly downtime from happening in the first place. Here’s how you can do just that:

1 Use managed IT services

While cloud services providers grant access to their cloud setups, a managed IT services provider (MSP) offers more comprehensive services when it comes to your IT infrastructure. A dependable MSP will:

Closely align cloud services to your business objectives;

Optimally integrate cloud services to your existing IT infrastructure;

Build a multi-cloud setup so that you have redundant copies of your critical data that can be easily retrieved in case your primary storage provider fails (or goes out of business);

Provide 24/7 IT support for all of your tech concerns; and

Set up business continuity and disaster recovery plans in case natural or man-made calamities occur.

2 Implement the best and latest cloud security protections

Choose the MSP that can offer the latest security certifications and accreditations. Have them create and execute a cybersecurity plan for you to prevent hackers from stealing your account information or proprietary company files, or overwhelming your system with a distributed denial-of-service (DDoS) attack (a barrage of connection requests or messages from multiple computers that causes a system to slow down or even crash).

3 Regularly test contingency plans

Business continuity and disaster recovery plans are useless if they fail during an emergency. Testing your plans for issues is invaluable for ensuring quick and effective response, not to mention it gives you peace of mind to know that your business can survive cloud outages.

4 Have a response strategy in case the worst does happen

Preventing downtime is what you want to happen 100% of the time, but it pays to have an excellent crisis communications plan in case a prolonged service interruption does happen. Send proper notifications to internal and external stakeholders so that they know what to expect and are empowered to make informed responses. In some industries, disclosures must be made to government agencies as part of regulations compliance.

Test and refine this communications plan together with your contingency plans so that you can mitigate the damage that downtime can cause.

5 Purchase cloud outage insurance coverage that helps defray the cost of implementing contingent plans

Consider the cost of Revenue Loss, Recovery Expenses, Lost Productivity, Intangible costs, SLA Liability. That is what parametric cloud downtime insurance was created to address. By implementing the disciplines listed above, by understanding your business vulnerability and the cost associated with downtime you can ensure you have the liquidity on hand to get your business back on track and retain your clients. Parametric cloud downtime claims are typically paid within 10 days of the incident with no loss adjusting or proof of loss required.

Waters Insurance Network

At Water’s Insurance Network, our success is built on centuries of experience in the insurance industry. We understand the challenges our partners and their customers face. And we’re here to help them WIN – every step of the way.

At the core of our success is a management team specifically dedicated to your success. Meet them here, or click to learn more.

Rogan Dwyer

Gerry Kennedy

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