The True Cost of Downtime and How to Avoid It

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We live in a world where everything is connected 24/7. Between mobile devices and cloud computing, people can connect instantly and interact with people, brands, and organizations across the globe. In reality, availability is facilitating these connections at the core. When outages occur—and they are at an alarming rate—it can disrupt business and the bottom line.

In addition to the financial ramifications of downtime, a company’s reputation suffers, too. Most people are familiar with the headlines where a major retailer’s site goes down on Black Friday. It’s an embarrassing and expensive problem. In most cases, it’s also avoidable.

In fact, a recent survey of global IT decision-makers showed that these leaders believe more than half (51 percent) of outages are avoidable.

Outages a 50/50 Gamble

According to a survey of IT decision-makers from around the world, outages and brownouts are more prevalent than many think. Of those surveyed, the vast majority (96 percent) reported experiencing at least one outage in the last three years.

Beyond that, more than half (53 percent) believe that it’s likely their company will experience such a severe brownout or outage that it will land them in national media headlines. The same percentage (53 percent) also believe that it’s likely their company will experience a brownout or outage bad enough to result in someone losing their job.

Availability an Expensive Gamble

It’s apparent that the consequences of an outage or a brownout are unpleasant. In addition to a black mark on a company’s reputation and the internal turmoil of holding employees accountable, downtime hurts the bottom line. It’s estimated that companies that experience frequent downtime have up to 16 times higher costs than their counterparts that have fewer instances of downtime.

Lost revenue is really just a small slice of the pain pie. Companies that experience downtime feel the consequences of compliance failure, lower productivity, the cost of mitigation, lowered stock prices, and more. Damage to a brand’s reputation can be both qualitative and quantitative. In some cases, these consequences total up to result in a business failing.

Companies that manage to survive exorbitant downtime pay the price. In addition to higher overall costs, companies with frequent downtime require almost twice as many people for troubleshooting on top of monitoring software. Troubleshooting also tends to take twice as long for these companies.

This lag in productivity and efficiency is more than just an inconvenience; it’s expensive. Gartner posits that the average cost of IT downtime is $5,600 per minute. That translates to $336,000 an hour, on average. Companies that fall into the category of frequent downtime described above should double it. It’s easy to see how quickly the costs add up.

To be sure, 98 percent of organizations report that a single hour of downtime costs over $100,000, 81 percent report that it costs their business over $300,000, and 33 percent report that one hour of downtime costs their firms $1-5 million.

The costs are steep, and the potential fallout is grave. This makes it imperative for all businesses—from SMBs to the enterprise—to work with trusted partners to avoid unanticipated downtime. Partnering with an experienced managed hosting provider can amp up preparedness and reduce the costs and negative consequences that downtime triggers.

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About Author

Kelly Goolsby is the Director of Enterprise & Technical Solutions at Liquid Web. He has worked in the hosting industry for nearly 16 years and loves seeing clients use new technologies to build businesses and solve problems.

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