Factors to Consider when Procuring DRaaS

Disaster Recovery as a Service is complicated, and DRaaS pricing is even moreso. Make sure you understand these core pricing factors before vetting vendors!

disaster flood
Rob Rodier

Dec 13, 2021


Based on projections, by the end of 2024, the Disaster Recovery as a Service (DRaaS) (sometimes known as fast failover) market will have grown by $27.44 billion dollars in four years. That’s a compound annual growth rate of 43%.

In a previous article, we covered 4 Reasons You Need Disaster Recovery as a Service. If you haven't read it, it's a great primer on DRaaS use cases. To complement that article, we'll now break down the basics of DRaaS and DRaaS pricing to further help you understand if this form of disaster recovery (DR) is a good fit for your business.

What is DRaaS?

In business, disruptive events are costly. Estimates from 2020 show the average cost of one hour of data center downtime is $260,000. This daunting sum is inspiring large corporations to find room for disaster mitigation in their budget in one form or another. And as the continued adoption of cloud-based computing drives the price tag for cloud services down, DRaaS solutions are increasingly attractive to smaller businesses.

So, what is DRaaS (Disaster Recovery as a Service) anyways?

Disaster recovery as a service is similar to other cloud-based recovery options in that it relies on off-site, third-party providers to ensure data protection and business continuity during a disruptive event. And DRaaS differs from data recovery (DR) and backup as a service (BaaS), which are other forms of disaster recovery solutions.

All three of these DR solutions ensure business-critical information won't be lost during a disruptive event. But DR and BaaS only act as literal backups; they don't handle the recovery of critical information and systems. This means business owners still need a disaster recovery strategy and employees trained to implement it as needed.

DRaaS, on the other hand, as its SaaS-related name implies, functions as a complete disaster recovery service. This means both the continuity of data and the IT infrastructure and the recovery protocols are handled by the DRaaS service provider. This takes the strain of disaster recovery off in-house IT teams, which can be a big benefit to small and large businesses.

How Does DRaaS Work?

As opposed to backing up data and infrastructure on off-site servers, DRaaS providers host an exact replica of a business's IT infrastructure. This IT mirroring functions as a real-time redundancy, meaning that during a disruptive event, access to IT resources and applications shifts to the DRaaS failover site. And the DRaaS provider acts as an IT surrogate until on-site service is restored. This restoration of service to the business is referred to as a failback.

In general, there are three types of DRaaS services that work in this way: self-service, assisted, and managed. Each of these services may be offered through a contract or pay-as-you-go model:

  • Self-service DRaaS replicates IT functionality and data, and like DR and BaaS, an in-house team is required to manage the failover and failback process during a disruptive event. Of the three types of DRaaS, self-service options are appealing to businesses that want to avoid vendor lock-in. Self-service is also the most capable of integrating with in-house tooling and software.

  • Assisted DRaaS is somewhat rare, and it's helpful to think of this solution as disaster recovery plus consultancy. Like self-service DRaaS, those who opt for this solution will be in charge of their own DR strategy. But an offsite advisor is available to help implement, test, and manage your DR solution. This solution can be optimal if a given business has unique and/or highly customized applications.

  • Managed DRaaS solutions allow business owners to completely outsource all aspects of disaster recovery, testing, failover, and failback. Managed DRaaS completely removes the burden of DR strategy and management from the business and its IT team.

What Are the Major Factors that Affect DRaaS Pricing?

Naturally, the three types of DRaaS solutions vary in cost. And no one DR provider fits all businesses perfectly. For businesses that have dedicated, experienced IT teams, self-service DRaaS could be a cheap, efficient way to ensure business continuity during a disruptive event.

On the other hand, businesses with smaller (or no) IT teams might find value in paying more on an ongoing basis to have their DR managed by a third party.

Many factors affect how much your DRaaS solution would cost. Some of these core pricing factors include:

Business Critical Applications

Before investing in DRaaS, a detailed business impact analysis needs to be conducted (assuming one hasn't been already). These analyses are typically included as part of a business continuity plan.

In addition to giving you the tools to ensure you're compliant with legal and data security requirements, the impact analysis will identify how many critical applications a DRaaS provider will need to replicate as part of their failover/failback solution.


Through the process of creating the business continuity plan, businesses should understand both their Recovery Time Objective (RTO) and Recovery Point Objective (RPO).

RTO is a measure of time and refers to the maximum amount of time that can pass after a disruptive event before business needs to resume.

RPO refers to how much data your business can afford to lose between the disruptive event and the time at which the DRaaS failover replica re-establishes IT connectivity. Together, these two benchmarks help ensure that any DRaaS solution used as part of a disaster recovery strategy will meet the needs of a given business.

Number of Virtual Machines

Virtual Machines (VMs) are what make the replicated IT infrastructure functional. At their most basic, VMs are software-based environments that simulate hardware-based environments. DRaaS solutions that employ VMs are cost-effective at scale compared to physical servers, as increasing (and decreasing) desired workloads become a completely virtualized process.

When a DRaaS provider receives notifications that a disruptive event occurred, the VMs dedicated to the DRaaS replication switch on as part of the failover process. From this point until failback is possible, these VMs remain accessible through an external IP. That said, the complexity of the infrastructure to be replicated determines how many VMs are required.

Hypervisor Type

In addition, virtualization on a system requires specific programs called hypervisors. A hypervisor (aka a virtual machine monitor), is the software that creates and runs virtual machines (VMs). A hypervisor allows one host to support all VMs by sharing its resources, such as memory and processing.

A hypervisor license can be an additional pricing factor for on-premises/self-service and assisted DRaaS solutions.

Quantity of Compute

In addition to VMs and hypervisors, DRaaS providers will determine the resource utilization of your IT infrastructure to compute; storage and memory will also all be taken into account, as the dedicated resources will vary from business to business.

To give a sense of how this all can add up, Assurance IT provides a rough example: "To replicate and host between 40 and 50 virtual machines, our customers on average pay between $2,500 and $3,500 per month. This includes licensing, compute, memory, and dedicated storage. Therefore, a DRaaS solution [in Assurance IT's example] costs between $90k and $126k over three years."

Storage in Use for VMs Currently in Production

Part of your DRaaS pricing will involve storage costs for the failover site itself. These charges will also include additional storage needed to maintain the necessary number of recovery points determined by your RPO. While only providing rough estimates, time spent with a DR sample cost calculator is a good way to see which business factors impact pricing the most in this way.

Special Security and/or Compliance Needs

When vetting DRaaS solutions, make sure you have a clear understanding of what security features are part of the solution itself, in addition to who will be responsible for security and compliance updates (and how these updates will be applied).

Due to the nature of some businesses, data storage and privacy compliance are now much more important due to 2018's EU General Data Protection Regulation (GDPR). Vendors should provide any assurances related to where your data will be stored geographically to ensure compliance. And, due to the scale at which some disruptive events can/do unfold, the actual data centers used by a potential DRaaS provider may need to be located a minimum specific distance from the business it will serve.

How to Conclude If You Need a DRaaS Provider

Pricing factors aside, some companies just don't need the business continuity DRaaS providers help ensure. In these cases, ensuring critical data is backed up in an off-site data center can suffice.

But if your company relies on minimal or no interruptions during a disruptive event, rolling the dice with disruptive events may simply be, well, bad business. And, as mentioned, as data privacy laws evolve, DRaaS solutions may increasingly be required to ensure compliance with HIPAA, PCI DSS, and other regulations, whether or not a disruptive event is taking place.

That said, the pricing variables between DRaaS providers get complicated quickly. And disaster preparedness is stressful enough. It doesn't help to add pressure by wondering if you're choosing the right provider for your company.

But you're in luck. Separating the downtime-worthy data centers from the duds is our bread and butter at Lightyear. In fact, Lightyear helped a customer save 30% ($300k!) on a DRaaS procurement project earlier this year - check out the case study here.

So, if you need help navigating the dramatic world of DRaaS, our experts are standing by to speak with you! Contact us or schedule a demo to get started.

Did you enjoy this blog? Check out our Ultimate DRaaS (Disaster Recovery) Guide next!

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