The three major costs of business IT downtime

The three major costs of business IT downtime

The individual components of your business's IT systems need to work seamlessly — even more so with the COVID-19 crisis now forcing companies to depend on a distributed workforce. When they don’t, you are bound to suffer losses. These are the top three losses businesses suffer the most because of IT downtime.

Three costs of IT downtime infographic

Financial loss

No two businesses are affected by downtime events the same way. There is, however, one thing that they all have in common — paying the cost of downtime.

One of downtime’s biggest victims in recent years is British Airways (BA). In August 2017, the airline had to cancel more than 700 flights, leaving 75,000 passengers stranded. An engineer had accidentally disconnected the power supply of a data center at Heathrow Airport. Upon reconnection, the resulting power surge took out critical IT systems, setting the company back $112 million.

In November 2019, the airline suffered another IT failure, canceling flights and stranding passengers yet again. In total, BA has had five major IT failures since August 2017.

In March 2019, Facebook, Inc. suffered a global outage that rendered Facebook and its other divisions, Instagram, WhatsApp, and Occulus VR either inaccessible or malfunctioning for at least 14 hours. Two days later, the company announced via Twitter that a server configuration change caused the outage. Some users may argue that going half a day without Facebook is a welcome respite, but those 14 hours cost the company $90 million.

Companies are highly dependent on IT systems that business owners talk about downtime in terms of hours. For smaller companies, these estimates will give you a clearer idea. According to ITIC’s 2019 Server OS Reliability Survey, an hour of IT downtime cost 98% of businesses at least $100,000. Meanwhile, 86% of businesses lost $300,000. Notably, these costs exclude litigation fees, fines, or criminal penalties stemming from lawsuits or noncompliance with regulations.

Reputation loss

IT downtime can quickly become a PR nightmare, especially if customers aren't informed of when normal operations will resume.

Blackberry, Ltd. suffered a PR disaster in 2011 when a faulty router caused a three-day disruption of services for 70 million customers worldwide. The company could neither provide its customers a satisfying explanation nor an ETA for when issues would be resolved. Many Blackberry users vented on social media, with some saying they’d leave the brand for its competitors.

The brand seems to have suffered dearly — the company’s market share decreased by 2.9% and eventually by as much as 16%. Once a household name associated with President Obama, it is no longer among the popular personal devices today.

Data loss

In a digitally driven economy, one of most companies’ biggest fears is losing critical business data. And among its most common causes is IT downtime, from hardware and software failure to power outages that disable data centers.

A 2019 Dell report revealed that of the companies that experienced IT disruption, 27% incurred irreparable data losses — twice as much as 2016 losses. Meanwhile, the National Archives and Records Administration reported that 93% of companies that experienced data center downtime for 10 days or more filed for bankruptcy within a year.

IT downtime can cause many problems for businesses, even leading to their closure. This is why organizations should always have a reliable way to protect themselves. That means having a stable and redundant IT infrastructure, or one that is properly configured, securely monitored, and has emergency backup resources.

Don’t let your company be the victim of an unstable IT infrastructure. Here at Midwest Data Center, our engineers can assess your systems and uncover issues that can lead to downtime. Talk to our experts at our Rock Port, Maryville, or St. Joseph offices today.

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