Beyond the monetary costs, IT downtime can wear on your business’s productivity levels. Network downtime got you down? By now, it shouldn’t surprise you to know that the cost of network downtime can be astronomical. Imagine this An employee comes into work, goes to log-in at his workstation only to be alerted that his password is incorrect. The research firm is quick to point out, however, that this is just an average. Between losing data, battling employee productivity, and maintaining a positive revenue stream, you may wonder: How much is my business losing during the occasional network downtime? Network downtime affects any business that uses the Internet in some capacity to operate. That’s over $300,000 per hour. Costs are highest in high-transaction industries like finance and ecommerce where downtime means lost money. According to a study done by Gartner, the average cost of network downtime is $5,600 per minute. … But there was a time not so long ago when businesses could sustain up to 24 hours of it. Do you know how much network or application issues cost your company? Indirect Cost: Liability. To calculate Lost Productivity, first determine each employee’s hourly salary. These network and application outages cost the business money, and a lot of it. Collect real-time network connectivity and performance data with remote sensors that enable faster root cause analysis than many traditional monitoring solutions. They can include but are not limited to: These may not be as tangible at revenue and productivity costs, but they are equally as important when deducing your real downtime costs. These are the costs accrued while fixing the issue. Gartner analyst Andrew Lerner pegged network downtime at around $5,600 per minute in 2014. Any disruption, from voice to email to unified communications or data transmission can severely disrupt employee productivity, cost you revenue, and negatively affect customer loyalty. This would be the revenue per week/40 hrs. In TSG’s article, it is stated that Facebook may have lost up to $80,000,000 due to its 14 hour downtime. Our network performance monitoring and visibility into the end-user’s experience helps you find the root cause of issues and proactively address these issues before your users are complaining. In March of 2019, the Nordic metals firm, Norsk Hydro, suffered a ransomware attack called LockerGoga that shut down its global operations. The average cost per minute of unplanned downtime is now $7,900, up a staggering 41 percent from $5,600 per minute in 2010, according to a survey from the Ponemon Institute, which was sponsored by Emerson Network Power. Research from the Aberdeen Group suggests that IT downtime costs businesses an average of $163,674 per hour. That’s when IT starts troubleshooting, with limited objective data to find the root cause of the problem; many times only to find that their troubleshooting isn’t successful. An Avaya report the same year found that averages ranged from $2,300 to $9,000 per minute depending on factors like … In today’s fast-paced business world, the costs of IT/network downtime can be staggering. The average cost of downtime . Data from Statista suggests that the average cost of critical server outages in 2019 ranged from $301,000 and $400,000 — per hour. Network downtime costs companies, big and small, many millions of dollars each year in lost revenue, and lost revenue is only the beginning. But their salaries are a fixed cost and do not change even during the downtime. These costs ultimately affect businesses that rely heavily on uptime. Calculating downtime's drag on productivity and profit can help make the case for network improvements. Average cost per hour of enterprise server downtime worldwide in 2019 [Graph]. That’s over $300,000 per hour. A study by ITIC found that 34% of enterprises report costs in excess of $1 million for an hour of downtime. When your network goes down, employees lose access to the web, software programs, data files and email. For both IT and the company, these user issues are more than just an inconvenience for all parties involved. Network failures and power outages aren’t the only culprits when it comes to downtime either. These occur when downtime damages your reputation or your brand. Although being an Account Manager at NetBeez lends me to hear this similar problem many times each day, each company’s network infrastructure can be very complicated and unique. To calculate the productivity lost, you must first calculate each employee’s salary/hr. (Uptime, remember, is simply the time or percentage your site is up and operational.). There are also intangible costs. Here's an example of how downtime in the service industry could play out: Your business is a staffing agency for managed IT … Regulatory fines can cost well beyond $250,000. Calculating out to the hour, this can run you $336,000 for one precious hour of lost business. By 2016, that statistic had exploded by 59% to $260,000 per hour. The average cost of IT downtime is about $9,000 per minute, according to Ponemon Institute. Cost of a Tech Fail. Depending on the industry, a single incident can cost well over $1 million. everything requires the network to actually be up and running. Then, estimate the percentage of productivity that is dependent on uptime and this could be different across employees. Every time you get interrupted, it takes on average 23 minutes to get refocused on your prior task. For example, when the Visa credit card network had half a day downtime in Europe in 2018, nearly 5.2 million transactions were affected even though 90% of transactions in the region still took … Use these simple formulas to get an idea of what downtime really costs your business: To Calculate Your Average Labor Costs During Downtime: LABOR COST = P x E x R x H. P = number of people affected E = average percentage they are affected R = average employee cost per hour H = number of hours of outage. These numbers, needless to say, represent significant … August 21, 2014: Tina Plant, Marketing Manager - Reducing Costs. This is a follow-up to last weeks post on network downtime as several have asked “What is the cost of network downtime?” Based on industry surveys, the number we typically cite is $5,600 p/minute, which extrapolates to well over $300K p/hour (see Ensure Cost Balances Out With Risk in High-Availability Data … A single hour of downtime costs AWNC approximately $270,000 and the company was experiencing network failures twice monthly resulting in significant downtime and loss. Here is a simple way to calculate how your business could be affected: You need to calculate the amount of revenue generated per hour by your business. The survey examined common network interruptions organizations face -- network brownouts, in particular, and the … Simply take ‘revenue per week’ and divide it by 40 hours. hbspt.forms.create({ Research specific to small and medium-sized businesses conducted by IDC reports that network downtime costs $20,000 per hour for 80% of SMBs. Your employees are still being paid regardless of whether they’re able to perform their jobs or not. These are the costs that can sting the most for the long-term. Uptime is time/percentage your site is up and operational online. In our theoretical example I’m going to leave out Recovery and Intangible Costs, which still leaves us with a cost of downtime equaling $3,412.50/hour. Check out the remote worker solution page, and schedule a demo to learn more. sfdcCampaignId: "7011Q0000016ftlQAA" Over 25% reported downtime costs of over $500,000 per hour (!!). In our theoretical example I’m going to leave out Recovery and Intangible Costs, which still leaves us with a cost of downtime equaling. The average cost of credit monitoring required per record lost is $350.00 per record. But, failing to gain that visibility into your network and application performance is a very costly mistake. Including intangible costs into the Total Downtime Cost Formula gives a better understanding of the long-term consequences that can occur due to downtime. In a USA Today survey of 200 data center managers, over 80% reported that their downtime costs exceeded $50,000 per hour. Monitoring and measuring these extensive networks can be a very daunting task. The frustrated staff has to walk away from other vital projects to address the interruption. To calculate the productivity lost, you must first calculate each employee’s salary/hr. That is around $300,000 per hour. For any business, $300,000/hr is a lot on the line. All Rights Reserved. Privacy Policy | Terms of Use, Whether in the hospitality, healthcare, tech, education, oil and gas or the finance industry, NetBeez’ prospects and customers all have a similar problem: they are looking for a way to monitor their vast network infrastructure. In March of 2019, the Nordic metals firm, ransomware attack called LockerGoga that shut down its global operations, 5 Steps to Prepare Your Organization for Extended Work-from-Home Scenarios. The most crucial aspect of almost every network is availability, scalability, network performance, agility, etc. Lost Revenue = Revenue/hr x downtime(hrs) x uptime(%), Example: If my revenue is $3,000/hr and my network was down for 2 hours and my uptime percentage is 30% my lost revenue would equal: $1,800/hr. Although being an Account Manager at, For both IT and the company, these user issues are more than just an inconvenience for all parties involved. If you are ready to end the risk of downtime, contact us now to find out how our IT solutions can minimize that risk and fit seamlessly into your business. This left their 35,000 employees around the world unable to progress with their work. An important component to figure out your lost revenue is your business’s revenue dependence on. These are present when network or application downtime affects your reputation or your brand. These network and application outages cost the business money, and a lot of it. Unfortunately, network engineers rely on user complaints, such as, “the network stinks”, or “Salesforce is slow”, or “Google won’t load” to gain insight into their network. For example, if you are an e-commerce store and solely sell online, you are 100% dependent on the internet for your business’s revenue. , it is stated that Facebook may have lost up to $80,000,000 due to its 14 hour downtime. For any business, $300,000/hr is a lot on the line. Downtime costs are a very real threat to any business. Today, the problems, issues, and outages that occur across the network and network applications are often caught after the fact. He was going to be let go. Information Technology Intelligence Consulting. That is around $300,000 per hour. Businesses do not only lose money due to IT downtimes. IT downtime can cost up to $5600 per MINUTE. Costs of network downtime. of retailers su˚er lost sales during a network outage.1 of retailers cannot process credit cards while disconnected from the network.1 72% 61% ELIMINATE DOWNTIME … The many SaaS applications, multiple, remote, and global offices, cloud environments, and tech-savvy remote users can be an intimidating feat. Lastly, before adding up all of these costs, you’ll want to determine the Intangible Costs. Since almost any business can experience downtime, almost every business can have subsequent downtime costs. Every time you get interrupted, it takes on average 23 minutes to get, Network failures and power outages aren’t the only culprits when it comes to downtime either. That’s a lot of money to be losing due to a network issue that could have been pinpointed and fixed in 15 minutes. Ransomware attacks can lead to very unhappy clients, … Unplanned downtime costs businesses an average of $2 million over the last three years. Once you’ve calculated each separate cost, you can finally put them together into the main formula provided above and see your total cost of downtime. So how do you know where you stand when it comes to downtime costs? Source: 2016 Cost of Data Center Outages Report from Ponemon, sponsored by Emerson Network Power Cost of Network Downtime He walks to his boss’s office to notify him of the issue. Here is a simple way to … Having made it through almost a year with requirements to work-from-home, some organizations were prepared, and some weren’t. Because there are so many differences in how businesses operate, downtime, at the low end, can be as much as $140,000 per hour, $300,000 per hour on average, and as much as $540,000 per hour at the higher end. According to a study done by. Network downtime and latency cause a lot more than groans from unhappy–and unproductive–employees. Understanding the impact of IT downtime requires vision beyond the walls of your office. The average cost of downtime is $5,600 per minute, according to a 2014 study by Gartner. At this point, they are still working to calculate the financial impact of the attack, loss of wages, productivity, and stock price drop. Whether in the hospitality, healthcare, tech, education, oil and gas or the finance industry, NetBeez’ prospects and customers all have a similar problem: they are looking for a way to monitor their vast network infrastructure. According to a 2016 study, the average cost of downtime across all businesses was $260,000 per hour. To Calculate Potential Downtime … However, downtime isn’t a one-size-fits-all … According to another survey, while companies can't achieve zero downtime, one in every 10 companies said that … According to the Ponemon Institute’s annual report, the average cost of unplanned outages is $8,850 per minute. According to Gartner, The average cost of network downtime is around $5,600 per minute. For example: If your company’s revenue is $5,000/hour and your network was down for 2 hours with an uptime percentage of 30%, your lost revenue would equal $3,000/hour. Lost Productivity = Employee Salary/hr x Utilization % x Number of employees (with same Utilization %). Like failing to backup files, IT downtime can be a real pain. The point is the research all agrees – your network goes down, you lose money. According to a study done by Gartner, the average cost of network downtime is $5,600 per minute. How do you support home users, now that many of us have switched to Work From Home? These complex networks have IT today still trying to figure out how to manage all these tools and users. There are a lot of components in network infrastructures today, so issues can arise in many different areas. When systems go down, it can represent massive losses — according to Gartner, companies lose an average of $5,600 per minute of network downtime or over $300,00 per hour.