The true cost of network downtime

Every business wants to reduce its costs. Technology has been adopted by most businesses by now, but many do not manage their system efficiently and do not plan on how to address the inevitable downtime.  This term refers to the period of time during which a system fails to perform its primary function. Avoiding upgrades in technology to reduce expenses will almost certainly increase them. Many businesses also underestimate the costs of downtime or do not think it is worth the money.


To truly understand the importance of implementing a network downtime prevention and recovery plan, it is vital to understand the full costs of network downtime. When systems unexpectedly fail or crash, downtime has a direct influence on business operations. Most business cannot operate at all and this costs them a lot of money. Apart from monetary losses, data losses pose a huge threat to your business. Research conducted in the United States shows that downtime costs have risen a staggering 41% since 2010. When data centres go down, the businesses they support suffer. With average incidents lasting 86 minutes, the average cost per incident is now $69,200. These losses depend on many factors, including: revenue, industry, duration of outage, number of employees and time of day. Businesses which are heavily dependent on data transactions, like banks and online retailers, experience significantly higher losses per hour.


These downtime costs include direct and indirect expenses. Direct costs are immediate fines, fees and expenses. Indirect costs refer to long-term costs resulting from loss of business and tarnished reputation.


Direct costs:

  1. Legal repercussions – companies handling sensitive client information and financial data may be sued due to network downtime, especially if this is a result of a security breach. In certain cases, companies can also lose certification with the legal regulatory if they encounter downtime frequently.


  1. Data loss – downtime during the work day interrupts ongoing work, often damages data and causes errors when the network is back online. Furthermore, unsaved data is lost, meaning that employees have to work more hours to recover the data. This results in even more costs for the business.


  1. Productivity loss – most employees cannot carry out any work without the company network but would still get paid, this results in a loss of productivity. Resuming work and catching up after the system outage is also time-consuming.


Indirect cost:


  1. Loss of revenue due to lost customers – It takes time to build a loyal and trusting relationship with a client. The confidence a client has in the company is extremely important and a single incident could jeopardise it. This expense represents the cost of losing customers because of the downtime event.


  1. Damaged reputation – the reputation of a company can be easily affected as a result of network downtime. Surveys show that after experiencing a technical failure, more than half of businesses said that this damaged their reputation. This could result in negative reviews, loss of sales and a loss of seasoned customers.


System failures are sometimes inevitable, but some are entirely preventable. Companies should make use of methods to avoid downtime, while developing contingency and recovery plans. I.T support agencies provide such services, as well as: emergency response, circuit monitoring and custom security configurations. The cost of these services is minimal when compared to the major potential