The report indicates that the Disaster Recovery as a service (DraaS) currently is in the growth stage. The industry registered an increase in the number of new entrants making the market very competitive. Generally, the industry is dominated by small to medium size enterprises (SMEs). Many of those suppliers are undertaking R&D to improve their technology and provide cost-effective products to consumers. The DRaaS is expected to register a 40% growth in the next 5 years.
The procurement intelligence report (2017-2021) explains that consumers need to adopt the practices indicated in the procurement to help them have better control, regardless of the market conditions. As such, it will allow them to manage their expenses and obtain high quality service. However, it notes that suppliers should be able to give assistance to consumers in order to optimize disk space, ensure data security and reduce the recovery time.
The intelligence report indicates that the challenge faced by category managers is the identification of buyers having the availability of recoverable resources. It is noted that service providers have the tendency of over-subscribing recovery resources such as to monetize idle resources with the hope that buyers will not need to utilize the resources. Consumers also have an increasing worry regarding the protection of data since many service providers are dependent on the cloud platform which in itself can be subject to hacking, malware, or data loss. As a point of focus, the DRaaS indicate that consumer need to verify the security implementation offered to them by suppliers and only accept suppliers who use traditional recovery methods along with DRaaS.
The Procurement Intelligence report (2017-2021) is an in depth study providing insight for best procurement practices, cost saving opportunity, and category spend. Its main purpose is to help an organization with their business performance. According to Technavio procurement specialist Angad Singh, the growth of the DRaaS market is the direct result of organization awareness of the need for data protection and the effect of IT outage. Other factors fuelling the growth of the sector include: increased regulatory control, benefits regarding cost effectiveness, reduced recovery time, and testing flexibility.
In another point, procurement specialist of Technavio has provided a cost optimization outline to assist DRaaS buyers achieve cost saving and improve value benefits and category management.
Such cost saving opportunities involve:
- The adoption of technologies – DRaaS uses technology such as server virtualization, disk imaging, hybrid cloud, and duplication, which reduces recovery cost sometimes up to 15%. However, many DRaaS consumers desire that suppliers of Disaster Recovery as a Service can provide other services such as data backup sites, recovery resources, and backup space, to satisfy their ever increasing requirements. Consumers also have a preference of multiple back-up sites in various locations to mitigate the possibilities of network latency or natural disaster should it happen in the primary backup site.
- Negotiation strategies – Organization concern revolve also around the server downtime that sometimes leads to disruptions. It is estimated that about 50% of fortune 500 companies encounter server downtime of at least 1.5 hours each week. The loss estimated for such downtime is about $100,000 per hour. Hence consumer prefers services providers that can guarantee 24/7 support to minimize such downtime.
- Bunding of services – A strategic cost opportunity is IT professional services and DRaaS bunding. Organizations are bonded by certain regulation. For instance, The Information Security Operations of the US government adheres to the FISMA (2002) regulations, hence, organizations need to be aware of such regulations (FISMA, SOX, HIPPA, PCI DSS, etc.).
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