This is a great lesson in how not to be a pedantic nerd toward clients. By 100%, the client is obviously not specifying an uptime requirement of: lim (1 - 1/x) x->inf They're saying that downtime is unacceptable. As the consultant/contractor, it's your job to present various scenarios and reiterate to the client that redundancy/failover features introduced at each new level roughly doubles the hosting cost plus requi…
I've been in IT for 20 years so I may be jaded, but I disagree with your conclusion.
Your Levels don't seem to scratch the surface on achieving even 99.999% uptime. First of all, if you are planning on using vendors for your hypothetical 99.999% uptime you can stop there. Sure, they may promise that to you. But what is the penalty if they don't?
If you are planning on hosting this in your own data centers... Are you including diesel generators and massive diesel tanks to supply them in the event of extended power outages? What is your DDoS plan? What is your plan in the event of a hacker? What's your patching plan? These are just examples. The level of planning to achieve 99.999% uptime per year is massive. That's only 5 minutes of downtime per year!!
The bottom line is there are a handful of applications in the world that require this level of uptime. Unfortunately, every single client I have ever had was under the impression they required this level of uptime. It is my job to explain to them what reality is. If I don't, then I am not allowing them to prepare for the inevitable times that the system will be down no matter how much they spend or what they do.