According to analyst firm Gartner, by the end 2014 around 30 percent of mid-size companies will have adopted Disaster Recovery-as-a-Service (DRaaS). In total, Gartner predicts the DRaaS market could be worth $5.7 billion by 2018, which illustrates its potential. So why is DRaaS being touted as the next killer app in the cloud?

Companies are increasingly turning to on-demand hosted applications in the cloud like email, CRM and ERP, as well as cloud-based security systems, so it should come as no surprise that disaster recovery is also fast becoming an established cloud-based market.

DRaaS certainly addresses well-recognised pain points in IT disaster recovery management, including the need for frequent recovery-readiness testing and the cost of dedicated recovery floor space and facilities. If we just look at disaster recovery rather than DRaaS and the impact on business operations if not executed well, we can then start to see the real potential of DR in the cloud.

Ninety-one percent of respondents in a 2013 Ponemon Institute study reported experiencing unplanned downtime in the last two years. Although that’s not a shocking statistic to those in the cloud arena, what is alarming is the fact that an estimated 30 percent of organisations that experience a severe outage never actually recover.

Organisations often think a disaster is something that happens to someone else. When most people think of disasters, they immediately think about hurricanes or earthquakes or more recently the floods that we have all experienced in the UK.

But a disaster doesn’t have to be a naturally occurring one. It could be human error or a cyber-attack. Therefore, it’s important to have a plan B to protect your mission-critical applications and data. It’s also important to know that it’s more than a loss in revenue or five minutes of downtime—an IT disaster can wreak havoc on your overall brand and customer loyalty.

Here are five reasons why organisations should consider adopting DRaaS:

1. A Cost Effective Approach

On average it takes organisations two days to recover from an IT disaster, according to a 2012 Ponemon Institute study on disaster recovery. The same study found that this duration equates to $366,363 in costs a year. There are also hidden costs to experiencing downtime such as lost revenue and damage to the brand.

Organisations that use DRaaS reported cost savings as the leading benefit of using the public cloud for disaster recovery according to a study by research firm the Aberdeen Group. According to the report, you don’t have to worry about a large capital investment; you can trade that in by contracting DRaaS.

2. DRaaS Makes DR More Attainable

Disaster recovery in the cloud is now more attainable for businesses than it was five years ago. Before virtualisation, disaster recovery would have cost at least three times as much because an organisation needed to have multiple data centres, specialised software and large network connections. To do this in the physical world is extremely expensive. Now, virtualisation makes disaster recovery easier by encapsulating virtual machines (VMs) into a few files, making the data portable and in turn reducing costs.

DRaaS also gives the flexibility to look at their applications and define how they want them to be recovered. Do they want to protect the entire infrastructure? Do they want to protect just Tier 1 applications? Gone are the days of having to build a secondary site identical to a primary site and incur all the additional management costs and operational challenges.

3. DRaaS Enables x3 Faster Recovery

The risk of business interruption, loss of business-critical data and the length of time to recover that data are leading pressures driving organisations’ use of the public cloud for disaster recovery, according to the Aberdeen Group. DRaaS users are able to recover three times faster and drive up the percentage of data they’re able to recover twofold.

4. DRaaS Restores ‘Business As Usual’ Faster

According to the same study, businesses that use DRaaS reported faster recovery time from downtime incidents as the second leading benefit of relying on the public cloud. Protecting data is important, but the ability to recover applications efficiently and quickly is essential in restoring operations. Having data on tapes or using data storage without virtual resources and the ability to easily test isn’t disaster recovery; it’s just off-site back up.

5. Cloud DR Tests Require Less Intervention

With DRaaS, businesses can put their plans to the test anytime throughout the year without bringing down production. It’s extremely important to ensure applications and data or IT environments come up on another site and no data is lost.

In a 2012 study Forrester reported that only about half of companies conduct full tests once a year. Although organisations cite limited employee resources as the biggest stumbling block, cloud DR tests are now more automated and require less manual intervention.

For all the reasons above it is easy to see why companies are increasingly turning to the cloud to enable and manage their disaster recovery requirements. Cloud has levelled the playing field with many small and mid-sized companies now going live with disaster recovery systems and capacity for the first time. With the scalability and cost benefits offered by the cloud, DraaS is well on the way to becoming the next killer app in the cloud.