Economics of Network Downtime
Infonetics Research recently released a study that claims businesses (just in North America alone) lose as much as $100 million a year due to network downtime. Let us dissect that into numbers you and I can relate to.
- On average, businesses suffer from 14 (CA Technologies) to 87 hours (Gartner) of downtime per year.
- A conservative estimate pegs the hourly cost of network downtime at $42,000 (Gartner).
- The cost of unplanned downtime per minute is between $5,600 and $11,000 (Ponemon Institute).
- MTTR (mean time to resolution) per outage, on average, is 200 minutes (ITT Process Institute).
For a quick/rough calculation of your own potential revenue lost, use this equation provided by North American International Systems (NASI). Read more here.
LOST REVENUE = (GR/TH) x I x H
GR = gross yearly revenue
TH = total yearly business hours
I = percentage impact
H = number of hours of outage
Service costs are rarely zero.
Most businesses associate network downtime with force majeure events or security breaches, but such isn’t always the case. Their own employees could induce it too. For many, that was the case every September. This post is not about a challenge, but a growth hacking opportunity (transformed from an IT challenge). Rather than calculating potential revenue lost, you could count revenue growth instead. Tell me more...