What Does Network Downtime & Latency Cost Your Business?

Network downtime and latency cause a lot more than groans from unhappy–and unproductive–employees. It costs businesses hundreds of thousands of dollars, along with a damaged reputation.

Here’s a collection of statistics from a number of resources that help paint the picture of how much downtime and latency might be costing your business.

Ponomon Institute: Cost of Datacenter Outages 

The study of US data centers quantifies the average cost of an unplanned data center outage at slightly more than US$7,900 per minute. This is a 41% increase from the $5,600 it was in 2010.

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Network Computing, the Meta Group and Contingency Planning Research: Accessing the Financial Impact of Downtime

On average, businesses lose between $84,000 and $108,000 (US) for every hour of IT system downtime, according to estimates from studies and surveys performed by IT industry analyst firms. In addition, financial services, telecommunications, manufacturing and energy lead the list of industries with a high rate of revenue loss during IT downtime.


accessing the financial impact of downtime


ITIC: Information Technology Intelligence Consulting: One Hour of Downtime Costs > $100K For 95% of Enterprises

Over 95% of large enterprises with more than 1000 employees say that on average, a single hour of downtime per year costs their company over $100,000, over 50% say the cost exceeds $300,000 and one in 10 indicate hourly downtime costs their firms $1 million or more annually.

Moreover, for a select three percent of organizations, whose businesses are based on high-level data transactions, like banks and stock exchanges, online retail sales or even utility firms, losses may be calculated in millions of dollars per minute.

Those are the results of ITIC’s 2013-2014 Technology Trends and Deployment Survey, an independent Web-based survey which polled over 600 organizations in May/June 2013. All categories of businesses were represented in the survey respondent pool: 37% were small/midsized (SMB) firms with up to 200 users; 28% came from the small/midsized (SME) enterprise sector with 201 to 1,000 users and 35% were large enterprises with over 1,000 users.

ZDNet Findings by Rachel Dines, former Senior Analyst at Forrester Research: Quantifying The Impact Of Downtime

What is the industry average cost of downtime? Much depends on the organization, the industry, the duration of the downtime, the number of people impacted, etc. And not all of it is about dollars. Reputation, customer retention, employee satisfaction, and overall confidence can be shaken by even a short outage.

Not a great few weeks for uptime. Before you experience an outage, take the time to understand your impact of downtime, so you make sure to invest the resources to prevent downtime. Here is my quick list of inputs to an impact of downtime calculation:

  • Revenue losses
  • Impact to cash flow
  • Productivity losses
  • Compliance and/or reporting penalties
  • Penalties and loss of discounts
  • Impact to customers and strategic partners
  • Employee morale and employee confidence in IT
  • Damage to reputation and goodwill

What does downtime cost your business? What have you done to avoid these costs and keep your network healthy? Shoot us a message – we’d really like to know!

If you want to stop wasting money on downtime, contact us.  We’re here to help.

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