What Is Network Downtime?
Network downtime can be defined as a limited period of time in which your firm’s network, systems, or internal applications are inaccessible to customers or fail to perform their core functions. This, in turn, results in paused productivity and losses in revenue. Downtime is pretty much inevitable in the modern business setting. In fact, network outages hit 59% of multi-site businesses every month. But not all downtime is the same.
Planned downtime
This is an intentional, limited-time period that’s usually leveraged to improve site security or reliability. Planned downtime typically happens outside of peak business hours. So, it’s often encountered during the night. Moreover, it is typically communicated beforehand and it’s necessary in order to prevent down-the-road issues with your network management services, which could affect the overall stability of your informational systems.
Unplanned downtime
This type of business disruption occurs unexpectedly, and it’s often caused by general ISP outages, issues with internal hardware, cyberattacks, software bugs, or maybe even errors from internal workers. For example, the AWS US-East-1 outage of 2017 was caused by an engineer who typed a command incorrectly while trying to debug a billing system. Downtime is a reality of doing business; it can happen pretty much anytime, and it’s dangerous, as it can lead to losses in reputation and revenue.
Most Common Causes of Network Failures
Most of the time, unexpected downtime is caused by hardware failures or power issues. An NIC that failed, a damaged cable, or aging equipment that can’t keep up with external traffic, all these can be the source of downtime that will affect the overall reputation of your organization. Now, a significant percentage of these failures can be mitigated by the preventive network support services implemented by our firm.
That said, sometimes issues like power outages or issues with AWS and Cloudflare can impact business operations regardless of the preventive measures we put in place. Our network management services can significantly reduce the impact of downtime on your operations, and we can put in place recovery solutions that will mitigate the impact of business disruptions. But we cannot prevent them 100%.
What Is the Real Cost of Network Downtime (Per Hour)?
It really depends on the characteristics of your business and the quality of the network management services you have in place. According to Forbes, large enterprises can, in some cases, face financial losses of around $9,000 per minute during extensive downtime, which can result in operational deficits of around half a million dollars per hour. This can be even more for businesses active in high-risk sectors that can eclipse millions of dollars in losses when factoring in potential regulatory fines and reputational damage.
According to MEV, around 90% of midsize and large companies declare that downtime typically costs them more than $300,000 per hour. Plus, most of the time, the losses in productivity don’t equate to the financial equivalent of reputational losses.
Maybe a $20,000 downtime mishap is part of doing business. But the reputational hit that will accompany downtime will, typically, be slightly harder to write off. That’s why you need to be smart about it. Do you want to reduce the cost of network downtime? Then, maybe our commercial services can help.
Lost Revenue
Lost revenue is the most immediate cost of network downtime. When your crucial systems go offline, chances are that your target clients will not be able to access your website and directly interact with the services and products you commercialize. Every single minute of downtime will result in sales that, realistically, are pretty much impossible to recover later.
Employee’s Productivity
Losses
While most of your customers are only seeing the front-facing services implemented by your employees, the meat and bones of your operations are happening behind the scenes. No matter how inactive your website appears, your employees must work tirelessly in order to keep operations running.
During outages, your staff is paid, but is unable to efficiently follow up on their work-related task. An employee who’s unable to access your internal CRM systems, who has no access to the network, or who can’t log in to digital databases is one who’s consuming more resources than he’s producing.
Emergency IT Recovery
Costs
We pride ourselves on the quality and efficiency of our commercial and residential fully-managed IT services. That said, there is no going around it. If your operations are hit by unexpected downtime, the costs of taking them back and running will likely add up.
Our team will need to work overtime, we might be required to invest in an urgent hardware purchase, and it might be necessary to conduct an in-depth forensic analysis in order to determine the cause of the business outage. Our network management services are cost-effective. However, urgent IT operations will always be more expensive than planned proactive maintenance.
The Direct Financial Impact of Downtime
The Hidden Costs Most Businesses Overlook
Reputation Damage:
The cost of network downtime cannot always be quantifiable in dollars. Downtime can significantly erode the trust that customers place in your services and might result in clients not returning to your platform, even after the outage is resolved.
Customers, especially in the modern business environment, expect reliability and professionalism from the businesses with whom they collaborate. An outage of your operations could damage the reputation of your brand, lead to unfair negative reviews and make future partnerships harder to secure. Sure, our recovery services can help. But it’s better not to reach this stage in the first place.
Customer Churn:
What happens when you try to access a website and the page refuses to load? You wait patiently for the issue to get resolved and you postpone your actions? No. You will likely go to a site that commercializes similar products/services.
There is no such thing as loyalty in the modern online environment, and that’s why the cost of network downtime can explode even if the network outage is minimal. If your website is not available, a significant percentage of your customers will decide not to wait around and move on to the offerings of your business rivals. The real bad part? A good chunk of them will never return.
Compliance And Security Risks:
Sometimes, network outages can expose vulnerabilities in your internal security measures and attract the scrutiny of regulatory bodies. In highly-regulated industries, failure to protect against persistent downtime or to ensure the encryption and security of user data can lead to audits, legal actions, or financial penalties that risk impacting the ROI of your operations.
Our network management services and recovery solutions can help, and in the long run, they can represent the most financially advantageous solution to ensuring the security and stability of your ongoing operations.
Why Is Reactive IT Expensive?
Reactive IT focuses on fixing IT issues after they already happened and potentially affected the stability of your operations. Without proactive maintenance and monitoring, issues often escalate without prior warning until hardware systems fail completely. Imagine, for example, that your IT infrastructure collapses because of a small switch that has failed after many years of operation. The issue is not the replacement of the switch itself, but rather the impact on your venture’s other critical systems.
Reactive IT drives higher costs, and it requires emergency IT operations that can impact the performance of your employees and affect the overall reputation of your venture. Plus, reactive IT can expose your venture to security vulnerabilities that might transform your organization into a prime target for hackers. In the digital space, it’s never a good idea to play catch-up when your operational stability is at stake.
Downtime Is a Business Risk,
Not Just an IT Problem
Downtime, in the modern business environment, is more than a simple inconvenience. It can be a business-wide issue that affects the long-term profitability of your services and has drastic consequences both for the ROI of your operations and your venture’s growth prospects. Downtime will disrupt your cash flow, delay your operations, and make it so that customers will think twice before considering your services.
Additionally, downtime can make your business less appealing to external investors. Who will actually want to invest in the services of a company that can’t even keep its operations running? Downtime is a significant issue for businesses active in the modern digital landscape. But it’s also a common one. Unplanned downtime costs the world's 500 companies around 11% of their revenues. How much is that? Around 2.75 trillion dollars.
FAQ:
Q: How Can Businesses Predict Downtime?
A: Modern businesses can predict downtime by tracking hardware health, analyzing historical outage data and implementing automated alerts that help IT teams detect vulnerabilities before they result in full-on outages. Our team’s network management services can be used to implement these alerts, and we can fully manage your IT systems, regardless of the complexity of your operations.
Q: What Role Does Redundancy Play in Reducing Downtime?
A: Redundancy, in the modern business environment, is absolutely crucial to minimize the likelihood of potential downtime. Hardware fails. The question is not “if” but “when”. By investing in duplicate network paths or backup servers, businesses can ensure the continuation of their operations even during events outside of management’s direct control.
Q: Can Downtime Be Fully Prevented?
A: No. Unexpected hardware failures, cyberattacks and external natural disasters that affect business operations are simply part of the course when doing business in the 21st century. However, while we can’t 100% prevent them, our team can significantly reduce the cost of network downtime, and we can trim down on the number of outages that affect your systems every year.