What is disaster recovery (DR)?

It encompasses everything from equipment failures and local power outages to criminal or military attacks, cyberattacks and natural disasters.

Many businesses—especially small and mid-sized organizations—neglect to develop a reliable and practical disaster recovery plan (DRP). Without such a plan, they have little protection from the impact of major disruptive events.

The cost of unplanned downtime makes data loss protection essential. According to research from Splunk and Oxford Economics, the average cost of downtime can cost as much as USD 9,000 per minute (or USD 540,000 per hour) for enterprise organizations. For high-stakes finance and healthcare institutions that handle sensitive data, downtime can result in costs exceeding USD 5 million per hour.¹ Disaster recovery planning can significantly mitigate these risks.

Disaster recovery involves strategizing, planning, deploying appropriate technology and implementing continuous testing. While backups of data are a critical component, a backup and recovery process alone does not constitute a comprehensive disaster recovery plan.

Disaster recovery also involves ensuring that adequate storage and computing are available to maintain robust failover and failback procedures. Failover is the process of offloading workloads to backup systems so that production processes and end-user experiences are disrupted as little as possible. Failback involves switching back to the original primary systems.

Business continuity disaster recovery (BCDR) is a process that helps your organization resume normal business operations when a disaster happens. Business continuity and disaster recovery consist of many similarities, but they are two distinct approaches.

While BCDR is sometimes referred to as emergency management in business, it differs significantly from government programs like the Federal Emergency Management Agency (FEMA). These programs focus on civil emergencies and provide public safety and community-wide disaster assistance, rather than organizational IT and operations.

Business continuity planning (BCP) consists of systems and processes that ensure all areas of an enterprise can maintain essential operations or resume them quickly in the event of a crisis or emergency.

Disaster recovery planning is a subset of business continuity planning that focuses on recovering IT infrastructure and systems. It involves a disaster recovery plan (DRP) that maps out recovery steps from an unexpected event. Businesses rely on DRPs to manage various disaster situations (for example, natural disasters, ransomware, malware attacks).

The following seven steps are instrumental to effective disaster recovery planning:

1. Perform a business impact analysis (BIA)
2. Analyze risk
3. Prioritize applications
4. Document dependencies
5. Establish RTO, RPO and RCO objectives
6. Factor in regulatory compliance issues
7. Implement continuous testing and review

Creating a comprehensive disaster recovery plan begins with a business impact analysis (BIA). When performing this analysis, you are going to create a series of detailed disaster scenarios. These scenarios can then be used to predict the size and scope of the losses you’d incur in case certain business processes were disrupted. For instance, what if a fire destroys your customer service call center? Or an earthquake struck your headquarters?

This analysis enables you to identify the business functions that are most critical and determine how much downtime each of them can tolerate. With this information in hand, you can begin to create a plan for maintaining the most critical operations in various scenarios.

IT disaster recovery planning should be based on and support business continuity planning. What if, for instance, your business continuity plan calls for customer service representatives to work from home in the aftermath of a call center fire? What types of hardware, software and IT resources would need to be available to support that plan?

Assessing the likelihood and potential consequences of the risks your business faces is a crucial component of a disaster recovery strategy. As cyberattacks and ransomware become more prevalent, it’s critical to understand the general cybersecurity risks that all enterprises confront today. Furthermore, it is important to understand the risks that are specific to your industry and geographical location.

For various scenarios, including natural disasters, equipment failure, insider threats, sabotage and employee errors, it is important to assess your risks and consider the overall impact on your business.

Ask yourself the following questions: 

• What financial losses due to missed sales opportunities or disruptions to revenue-generating activities would you incur?

• What kinds of damage would your brand’s reputation undergo? How would customer satisfaction be impacted?

• How would employee productivity be impacted? How many labor hours might be lost?

• What risks might the incident pose to human health or safety?

• Would progress toward any business initiatives or goals be impacted? How?

Not all workloads are equally critical to your business’s ability to maintain operations, and downtime is far more tolerable for some applications than it is for others.

Separate your IT systems and applications into three tiers, based on how long you can afford to have them down and the severity of the consequences of data loss:

1. Mission-critical: Applications whose functioning is essential to your business’s survival.
2. Important: Applications for which you could tolerate relatively short periods of downtime.
3. Non-essential: Applications you could temporarily replace with manual processes or do without.

The next step in disaster recovery planning is to create a comprehensive inventory of your hardware and software assets. It’s essential to understand critical application interdependencies at this stage. If one software application goes down, which others are going to be affected?

Designing data resiliency and disaster recovery models into systems when they are initially built is the best way to manage application interdependencies. It’s all too common with today’s microservices-based architectures to discover processes that can’t be initiated when other systems or processes are down, and vice versa.

This situation is challenging to recover from. It’s also vital to uncover such problems when you have time to develop alternate plans for your systems and processes—before an actual disaster strikes.

By considering your risk and business impact analyses, you should be able to establish multiple objectives. These objectives include how long it would take to bring systems back online, how much data you can afford to lose and how much data corruption or deviation you can tolerate.

• Your recovery time objective (RTO) is the maximum amount of time that it should take to restore an application or system functioning following a service disruption.

• Your recovery point objective (RPO) is the maximum age of the data that must be recovered so that your business resumes regular operations. For some businesses, losing even a few minutes’ worth of data can be catastrophic, while others in other industries might be able to tolerate longer windows.

• Your recovery consistency objective (RCO) is a metric used in data protection services. This metric indicates how many inconsistent entries in business data from recovered processes or systems are tolerable in disaster recovery situations. It describes the integrity of business data across complex application environments.

All disaster recovery software and solutions that your enterprise has established must satisfy any data protection and security requirements that you’re mandated to adhere to. It means that all data backup and failover systems must be designed to meet the same standards for ensuring data confidentiality and integrity as your primary systems.

At the same time, several regulatory standards stipulate that all businesses must maintain disaster recovery and business continuity plans. The Sarbanes-Oxley Act (SOX), for instance, requires all publicly held firms in the US to maintain copies of all business records for a minimum of five years.

Failure to comply with this regulation (including neglecting to establish and test appropriate data backup systems) can result in significant financial penalties for companies, even jail time for their leaders.

Simply put—if your disaster recovery plan has not been tested, it cannot be relied upon. All employees with relevant responsibilities should participate in the disaster recovery test exercise, which can involve maintaining operations from the failover site for a specified period.

If performing comprehensive disaster recovery testing is outside your budget or capabilities, you can also schedule a “tabletop exercise” walkthrough of the test procedures. However, this kind of testing is less likely to reveal anomalies or weaknesses in your DR procedures—especially the presence of previously undiscovered application interdependencies—than a full test.

As your hardware and software assets change over time, you should ensure that your disaster recovery plan is updated accordingly. Therefore, it is important to periodically review and revise the plan on an ongoing basis.

 Go here to view an example of a disaster recovery plan.

Disaster recovery provides essential benefits, including:

• Business continuity: Helps businesses resume normal operations after an unplanned event.
  
  
• High availability (HA): Ensures high availability by enabling an automated or quick failover to a redundant system when the primary system fails.
  
  
• Reduced downtime: Restores essential systems and apps, providing minimal interruption.
  
  
• Cost savings: Reduces financial losses associated with downtime and data loss.
  
  
• Enhanced data security and compliance: Enables companies to safeguard their data and comply with privacy laws and industry regulations.
  
  
• Strengthened customer trust: Maintains customer confidence by ensuring consistent service delivery and keeping customer data safe, even during system failures or disasters.

Disaster recovery includes the following types of technologies and solutions:

• Disaster recovery sites

• Backups

• Snapshot-based replication

• Cloud DR

• Disaster recovery as a service (DRaaS)

Building your own disaster recovery data center involves striking a balance between several competing objectives.

Nevertheless, a copy of your data should be stored somewhere that’s geographically distant enough from your headquarters or office locations. This way, the same seismic events, environmental threats or other hazards that affect your main site can’t permanently destroy your data.

At the same time, offsite-stored backups take longer to restore from compared to the ones located on-premises at the primary site. Moreover, network latency can be even greater across longer distances.

Backup and restore serve as the foundation upon which any solid disaster recovery plan is built.

• Tape and early disks: In the past, most enterprises relied on tape and spinning disks (for example, hard disk drives (HDD)) for backups. They maintained multiple copies of their data and stored at least one at an offsite location.

• Modern disk-based backups: As organizations moved away from tape, disk-based systems became the standard for backup storage, offering faster capabilities. Modern disk-based solutions use hard disk drives or solid state drives (SSDs) in local storage, NAS or SAN configurations. This change dramatically reduced recovery times compared to tape-based systems.

A snapshot backup of a database captures the current state of an application or disk at a moment in time. By writing only the changed data since the last snapshot, this method can help protect data while conserving storage space.

Snapshots can be replicated to other locations or stored in the cloud for disaster recovery purposes.

Cloud DR uses cloud-based infrastructure and services to back up and recover data and applications, eliminating the need to maintain physical secondary data centers.

It enables you to protect application data and entire server infrastructure, including physical or virtual machines (VMs) that use either public cloud or dedicated service provider settings. You can configure backup schedules based on your specific requirements.

Cloud backup solutions can also integrate with virtualization platforms like VMware or cloud-native backup solutions. These approaches offer flexible scalability and cost optimization as your storage demands evolve and support organizations undergoing cloud migration. 

Disaster recovery as a service (DRaaS) is a third-party, cloud-based solution that provides data protection and DR capabilities on demand and on a pay-as-you-go basis.

DRaaS is one of the most popular and fast-growing managed IT service offerings available today. A 2023 industry study projected the DRaaS market would grow from USD 10.7 billion to USD 26.5 billion by 2028 at a compound annual growth rate.²

With DRaaS, your service provider documents RTOs and RPOs in a service-level agreement (SLA) that outlines your downtime limits and application recovery expectations.

DRaaS offerings also typically include cloud-based application recovery operations. This approach delivers significant cost savings compared with maintaining redundant dedicated hardware resources in your own data center. There are contracts in which you pay a fee for maintaining failover capabilities, plus the per-use costs of the resources consumed in a disaster recovery situation. This way, your vendor typically assumes all responsibility for configuring and maintaining the failover environment.

If you have already built an on-premises disaster recovery (DR) solution, it can be challenging to evaluate the costs and benefits of maintaining it versus transitioning to a monthly DRaaS subscription.

Most on-premises DR solutions incur costs for hardware, power, labor for maintenance and administration, software and network connectivity. In addition to the upfront capital expenditures involved in the initial setup of your DR environment, you need to budget for regular software upgrades.

Because your DR solution must remain compatible with your primary production environment, you should ensure that your DR solution has the same software versions. Depending upon the specifics of your licensing agreement, it might effectively double your software costs.

If you’re considering third-party DRaaS solutions, ensure that the vendor has the capacity for cross-regional, multi-site backups. If a significant weather event (for example, a hurricane) were to impact your primary office location, would the failover site be far enough away to remain unaffected by the storm?

If many of your vendor’s customers in your area were simultaneously impacted, would your vendor have sufficient capacity to meet their combined needs? You’re trusting your DRaaS vendor to meet RTOs and RPOs in times of crisis, so look for a service provider with a strong reputation for reliability.

For more of a comparative view of both solutions, check out:  “Disaster recovery as a service (DRaaS) versus disaster recovery (DR): Which do you need?”

Artificial intelligence (AI) integration is transforming disaster recovery with features that enhance threat detection, automate incident response and streamline management across hybrid and multicloud environments.

In the IBM 2025 Cost of a Data Breach Report, the average global costs decreased from USD 4.88 million to USD 4.44 million, representing a 9% decrease. According to the report, organizations were able to identify and contain a breach within a median time of 241 days, the lowest it has been in 9 years.

AI in disaster recovery delivers the following key benefits:

• Predictive analytics: AI models analyze historical data to predict potential failures or security breaches before they occur. This process enables predictive analytics and supports risk mitigation.

• Real-time monitoring: Machine learning (ML) system algorithms help monitor infrastructure health in real-time. Alerts help teams detect anomalies and prevent downtime or data loss.

• Automated responses: AI-driven automation can deliver faster recovery procedures than human intervention, significantly reducing RTO and RPO.

• Generative AI assistance: Large language models (LLMs) improve DR workflows by analyzing logs for root cause analysis, auto-generating incident documentation and providing conversational interfaces to support rapid recovery. This process helps teams translate data into actionable steps.