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What Is The True Cost Of Downtime?

By:Christine Fettinger

Downtime is bad for business. That is not a revolutionary or even controversial claim. It’s a fact.

For small businesses of less than 100 people, that downtime could mean up to $8,000 dollars per hour. For medium-sized businesses that cost can jump to $74,000 per hour!

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The main cost of downtime is not the fix itself – in fact, of total losses related to downtime, only 5% are related to repairs – but the halt in your business’ productivity. If a tech or natural disaster occurs and takes critical systems offline, employees will be unable to complete their tasks, yet your normal business expenses will carry on. You get all the expenses of running a business without the revenue you would usually generate. Even if downtime does not grind everything to a halt, some of your staff will have to divert themselves from their normal work to mitigate the problem – again reducing productivity.

Not all of the costs associated with downtime have a tangible price tag. The trust of your clients and the reputation of your company are invaluable assets that can erode with prolonged or frequent downtime issues. A diminished reputation can negatively affect your future business opportunities. Statistically, most companies don’t survive prolonged downtime. 93% of companies who experience more than 10 days of downtime file for bankruptcy within a year.

Some downtime is inevitable, but much of it can be prevented and mitigated.

What are the main causes of downtime?

  • Uninterrupted power source (UPS) battery failure: As much as 55% of downtime can be related to a UPS failure. If your power source fails, that can lead to a long list of complications like servers going down or lost data.
  • Cyber Attacks: Ransomware attacks have increased 167 times in 2016 and are still on the rise. All it takes is one employee opening a malicious attachment and your business data could be held hostage.
  • Human Error: This can’t be discounted. That huge AWS outage that happened in March? Human error. A massive domino effect happened when an Amazon employee took more servers offline than intended when debugging an issue. Accidentally unplugging key equipment, overloading the system, and improper installations can all cause downtime, but maintaining certain policies and procedures can cut down on human error.
  • Natural Disasters: Hurricanes, tornadoes, floods, and earthquakes happen. Having a plan for getting back to business if the unthinkable happens is the fastest way to recover.

How can I prevent downtime?

  • Have backups in place: Can you stand to lose a week’s worth of data? If the answer is no then you’ll need to run backups more often. Take into account how long you can go without certain data. Restoring backups can take time and ‘file-level’ backups can take longer to recover than ‘image-level’ backups. Make sure your backups are also stored at an offsite location.
  • Have a business continuity plan: This involves risk mitigation planning and business recovery planning. Risk mitigation should reduce the possibility of adverse events while business recovery planning helps ensure continued operation in the event of a server failure or natural disaster. Take into account the mission-critical data and systems your business needs to do its basic functions and prioritize them. A business continuity plan should be a ‘Plan B’ for how virtually every aspect of your business operates.
  • Test your backup and make sure your employees know what to do if a disaster happens: The worst time to find out there is a problem recovering backups is when you really need them. Verify your backups periodically. 

For more information about preventing downtime, get in touch with CyberStreams at (425) 2_74-1121 or