Sunday, November 15, 2015

What is the Real Cost of an Internet Outage?

How much does an Internet outage cost? When it comes to mission critical applications, most companies invest a lot of cash in order to see results. Unfortunately, they do not get the desired outcome all of the time. Despite the advancements made in IT infrastructure, businesses still have to face downtime due to internet outages.
While unplanned internet outage falls under the responsibility of the IT infrastructure to resolve, it is however a business issue that sadly many businesses have to deal with. A major part of the thorough evaluation process is being able to calculate how much money a business can lose for each minute, hour or day of downtime. That being said, while the exact number of the cost of downtime can be hard to quantify, certain enterprises which depend on their ability to deliver IT services to customers, such as ecommerce websites and telecommunications services are mostly hit the hardest with downtime, with the damages of downtime reaching as high as one million dollars or $11,000 of revenue being lost per minute.

Outage Period on Average

Whenever an internet outage occurs it is a race against time for businesses to get back online before everything spirals out of control for good. According to a study done by IP Process Institute, the average resolution time per outage is 200 minutes, while the average outage incident length that has been reported has been around 90 minutes.

Employee Productivity

Needless to say, downtime costs also have a major impact on employee productivity, which is measured in terms of wages and other benefits which are made idle due to downtime. Right after a downtime event it is good to investigate the problem and find out the cause (whatever it may be) to keep it from happening again. Other solutions such as hiring temporary staff to recover any lost data and enter paper transactions. If customer satisfaction has been damaged, you might also need a special marketing program so that those who are disgruntled can be won back before they change their mind for good. Whether it’s hiring more staff, having to pay overtime or coming up with a new marketing strategy to win back those who left due to the internet outage, it is the business that has to bear the brunt of unexpected internet outages.

Loyalty and Reputation

What is the reputation of your business worth to you? More importantly, what is your reputation worth? Probably a lot, while it could be hard to assess considering the long term effects, downtime costs usually involve the loss of business, tasks of employees diverted from other tasks to getting the IT system of track again and overtime expenses along with additional repair and maintenance costs. Of course, these costs will vary from company to company and will depend on when exactly the downtime even occurred, which systems were at fault and what measures will have to be taken to get it functioning properly again.
According to studies performed by IT analyst firms, on average companies in the US lose between $84,000 and $108,000 for every hour of IT system downtime. When it comes to total data center outages that had an average recovery time of around 134 minutes, the average costs were around $680,000.


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