How Much Does Downtime Really Cost Your Business?

This article explores the consequences and true cost downtime has on your business.

Most organisations fail to appreciate the financial damage caused by downtime. A single technical snag, power outage or natural disaster is capable of threatening the viability of a business. Downtime can hurt your business in a variety of ways including the direct loss of revenue from visitors unable to access your services.

According to research by Veeam Software, businesses are not paying enough attention to the needs of their users despite several high-profile outage incidents. It found that 84 per cent of organisations across the world suffer a gap between what their IT services deliver and what users demand.

With the world more connected than ever before, reliable 24/7 access to data and applications is crucial. This article explores the consequences and true cost downtime has on your business.

Direct Cost Of Downtime

The average cost of downtime per hour is approximately $80,000, with data loss resulting from downtime costing just under $90,000 on average. The annual cost of downtime for organisations can reach as high as $16 million.

Losses in the areas of labour, revenue and service are key contributors to the total cost of an outage. Potential revenue losses can be calculated by dividing gross revenue with total annual business hours then multiplying the figure by the length of the outage.

The average labour cost can be determined by multiplying the number of people affected with the length of the outage, hourly cost of the employee and the number of employees affected. As businesses spend more time using IT for day-to-day business operations, the cost can be significant.

To put it into perspective, Facebook has an availability rate of 99% – but still loses $56,117,907 per year. Of course, Facebook is capable of dealing with downtime losses better than smaller companies.

Indirect Cost Of Downtime

Aside from direct revenue, there are other costs that mount up and are difficult to quantify. This includes loss of customer and employee confidence and damage to the organisation’s brand.

It’s bad for your organisation’s reputation if visitors accessing your site are greeted with error messages or timeouts. Unhappy customers can lower staff morale, encouraging both to simply go elsewhere.

Downtime can also have a severe impact on your organisation’s brand, particularly with regards to the optimisation of your website in search engines. Availability and page response time factor into search results and ranking. Google prefers fast and reliable pages, punishing websites that fail to deliver. Decreased ranking hurts your traffic, which directly affects your revenue.

Minimising Downtime Costs

Your organisation can minimise the impact of costly downtime events with CodeBlue’s comprehensive data backup and recovery services. Using a three-tiered approach, we tailor our service according to your organisation’s needs as part of our managed IT support service.

With round the clock monitoring and support, we can spot issues before they become problems to prevent and fix downtime. Contact CodeBlue today to see how we can help.

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