Downtime: Causes, Costs and How to Minimize It
Given the 24x7x365 nature of today’s business, uptime and availability of critical resources play an important role in determining the success of an organization. To ensure business continuity, organizations must overcome unique challenges every day. One of these challenges is downtime.
Downtime is disruptive, costly and unacceptable in today’s competitive business landscape. Downtime can happen due to several reasons ranging from accidental data deletion to application failure to advanced cyberattacks. Without a robust BCDR solution in place, a downtime event can result in costly consequences and tarnish your brand’s reputation.
What Does Downtime Mean in Business?
Downtime is a period during which production or business processes come to a halt due to application unavailability, technical glitch, network outage or natural disaster. During downtime, a computer system, server or network is offline or unavailable, and employees are involuntarily unproductive — unable to conduct business or service clients. Without a comprehensive business continuity plan, downtime can potentially paralyze your organization, and in some cases, even cause irreparable damage.
Types of Downtime
Downtime can be broadly classified into planned downtime and unplanned downtime.
Planned downtime is scheduled and anticipated in advance and may typically be carried out during holidays, weekends or after hours. This ensures normal business operations are uninterrupted and employee productivity is unaffected. Planned downtime can be for routine maintenance or inspection, hardware/software upgrades, repairs or testing.
Since planned downtime is intentional and controlled, it doesn’t have any negative impact on business when done right. Planned downtime is essential to ensure systems, applications and servers are up to date and are functioning at optimal capacity. During planned downtime, IT professionals can also run tests to identify potential threats and fix them before they turn into real problems.
Unplanned downtime on the other hand is unintentional, unanticipated and can occur at any time. This can be due to several reasons including hardware or software failure, human error, malicious attacks or natural disasters. Since unplanned downtime is unexpected and occurs without a warning, preventing it can be a challenge. Regardless of its causes, unplanned downtime can bring your business to a grinding halt. However, by implementing a well-established business continuity plan, you can minimize the impact of downtime to a large extent.
What Are the Causes of Downtime?
There are several causes of downtime. Some of the main causes are explained below:
Human Error: Regardless of whether accidental or due to negligence, human error is one of the most common causes of unplanned downtime. An employee unintentionally deleting data or accidentally unplugging a cable or not following standard protocols can lead to costly downtime. Human error is unavoidable but with regular training and having a well-documented IT checklist or policies, its frequency can be reduced.
Hardware/Software Failure: Obsolete hardware or software increases the chances of application failure and system outage. Outdated hardware and software also result in inefficient performance, which can have a significant impact on productivity. If patches are applied without proper testing, it can corrupt the entire application.
Device Misconfiguration: Device misconfiguration is another major cause of unplanned downtime. Configuration errors can create security gaps in your network, making it vulnerable to cyberattacks. To avoid misconfiguration errors, you can automate the process instead of setting the parameters manually. Test the configurations in a lab setting before implementing the changes to your system.
Bugs: Bugs in a server’s operating system can impact its performance as well as lead to security issues. If patches aren’t applied on time or applied without appropriate testing, it can corrupt applications and lead to server failure.
Cybersecurity Threats: Cyberthreats, including sophisticated ransomware and phishing attacks, are one of the most dangerous and common causes of IT downtime, and can bring your organization to a standstill. Malicious actors can easily exploit vulnerabilities in your network, infiltrate systems and gain access to confidential data. Employee training and implementing security solutions, such as spam filters, multifactor authentication and file encryption, can go a long way towards overcoming cybersecurity challenges.
Natural Disasters: Natural disasters, such as hurricanes, floods and earthquakes, can disrupt power supply and communication or even damage hardware. This can have catastrophic consequences on your business if downtime extends for a prolonged period.
Downtime costs can vary depending on the size and nature of your business as well as the duration of downtime. As per Statista’s survey, which included respondents from across the globe, 25% reported that the average hourly downtime cost of their servers was between $301,000 and $400,000.
A recent survey of the Fortune 1000 conducted by IDC revealed that the average cost of an infrastructure failure is $100,000 per hour while the average total cost of unplanned application downtime per year ranges from $1.25 billion to $2.5 billion.
According to a recent survey conducted by Infrascale, 10% of SMBs reported their per-hour downtime cost was more than $50,000, while for 13%, the cost was between $40,001 and $50,000. For 25% of SMBs, the per-hour cost of downtime was between $20,001 and $40,000. A slightly larger share (26%) said the loss was around $10,000 to $20,000 while 27% said their cost of downtime per hour was under $10,000.
Downtime Cost Calculator
Knowing the cost of downtime will help you evaluate its impact on your business. Use the downtime calculator or follow the following steps to calculate the true cost of downtime.
- Identify areas of the business that generate revenue.
- Calculate Revenue/Hour: (average weekly revenue/40 hours) or (average monthly revenue/30 days)
- What percentage of revenue-generating areas rely on uptime? An e-commerce business is 100% reliant on uptime while a brick-and-mortar shop may only be 20% reliant.
- Calculate how much revenue is lost per hour per area of the business during downtime. If the above e-commerce business generates $100/hour, they lose $400 in four hours of downtime. Comparatively, a brick-and-mortar store generating $100 per hour incurs a loss of $80 in four hours of downtime.
You can also use these formulas to easily calculate lost productivity in the event of downtime.
Lost Productivity = (no. of users affected) x (effect on productivity [in percentage]) x (avg. salary per hour) x (duration of downtime)
Lost Productivity = (no. of users affected) x (effect on productivity [in percentage]) x (avg. profit per employee) x (duration of downtime)
Lost Productivity = (no. of transactions per hour) x (percentage of affected transactions) x (avg. profit per transaction) x (duration of downtime)
Other Costs and Effects of Downtime
Apart from financial losses, there are other consequences of downtime that organizations must deal with if unprepared. Depending on the frequency and extent of downtime, it can have both short- and long-term effects on your business. Listed below are some of the major consequences of downtime.
Lost Productivity: When downtime due to equipment failure or network outage occurs, mission-critical systems become unavailable for use. Without essential applications, systems and network services, employees wouldn’t be able to do their work. As such, employees are involuntarily idle. The length of an unproductive period depends on the duration of the downtime.
Lost Business Opportunities: In today’s interconnected digital world where businesses rely heavily on application uptime and availability, a moment of downtime can leave a negative impact on your business. Downtime can result in bad experiences, like your customers being unable to access your products or services while your employees are unable to support them since the necessary tools are out of order. Such instances can easily drive away existing clients as well as prospects.
Damaged Brand Image: In this fast-paced business landscape, customers expect a quick, seamless experience every time. Delays are intolerable and downtime is unacceptable. In such a scenario, a single downtime event can put your organization’s reliability and reputation at risk. Repeated downtime events can result in unhappy customers, which can quickly translate into bad customer reviews and tarnished brand image.
Data Loss: Downtime affects not only your business but your clients as well. Downtime due to cyberattacks, server or network outage can result in corrupt, damaged or stolen data. Unexpected downtime, such as a server outage, can potentially expose your valuable data or create security gaps, which cybercriminals can exploit to gain unauthorized access.
Downtime Monitoring and Prevention
Downtime is unpredictable and can happen to any organization irrespective of its size. So how do you prepare for the unexpected? Here are few tips that you can follow to reduce downtime risks and minimize its impact on your business.
Develop a Disaster Recovery Plan: Your business is only as resilient as your business continuity and disaster recovery strategy. Having a comprehensive BCDR plan in place will not only help you prepare for unforeseen downtime events but also enable you to take appropriate action when downtime does occur.
Deploy a BCDR Solution: A robust BCDR solution will make sure your business continuity strategy works. This will help you quickly recover in the event of downtime and allow you to provide uninterrupted services to your clients. Today’s BCDR solutions are automated and come with advanced features that keep you secure while also saving you time, effort and money.
Ensure Your Devices Are Up to Date: Regularly update and install patches for operating systems, hardware and software to ensure stability and security of your devices. Staying up to date with system upgrades and regular maintenance will help maintain the health of your devices and enhance performance.
Test Backups Regularly: When downtime occurs, your backed up data is your last resort. By securely backing up your critical data, you can quickly get back up and start functioning normally even when disaster strikes. Test your backups regularly to make sure your data recovery works. Ultimately, your backed up data won’t be of much use if you can’t restore the data when you need it the most.
Constantly Monitor Your Network and Devices: Implement a network and device monitoring tool to keep a tab on your devices’ health and performance. Network and device monitoring solutions add an extra layer of protection and help in detecting problems early, enabling you to resolve issues before they cause systems to crash.
Train Employees: Human error is one of the main causes of downtime. However, the frequency of human error can be greatly reduced with regular employee training. Your employees should be aware of emerging cyberthreats such as malware, ransomware and phishing attacks, and strictly follow the standard IT policies and procedures set by your organization.
What Is the Opposite of Downtime?
Commonly applied to networks and servers, the opposite of downtime is uptime — the measure of system reliability, typically expressed as a percentage of time a machine remains in a working or available state (i.e., 99.99% availability). Uptime is simply the period during which systems and applications are available and functioning.
Minimize Downtime With Unitrends
A recent survey conducted by Infrascale revealed that 37% of SMBs have lost customers and 17% have lost revenue due to downtime.
Downtime is unpredictable and a real threat to organizations of all sizes. Downtime disrupts business operations and can potentially cripple your business if you aren’t prepared. Having a state-of-the-art BCDR solution can benefit your organization and help you stay ahead of the competition when unexpected disastrous incidents, such as downtime, occur.
Unitrends powerful BCDR solution minimizes downtime and maximizes productivity while simplifying backup and recovery. Unitrends all-in-one backup and recovery solution helps protect your business and data anytime, anywhere. Our single, unified platform provides complete protection for your data no matter where it lives — physical, virtual, cloud or SaaS environments. With advanced features, such as ransomware detection, self-healing backups and dark web monitoring, Unitrends takes a holistic approach to data protection by leveraging key security integrations. With Unitrends, you can rest easy knowing that both your business and data are safe.