Are the Costs of Downtime Increasing?

Posted by MHO Networks on Jun 20, 2023 9:22:00 AM

Cost of downtimeEvery business owner is concerned about downtime. Just a few prominent examples show you why: 

  • In March 2015, a 12-hour Apple store outage cost the company $25 million
  • In August 2016, a five-hour power outage in an operation center caused 2,000 canceled flights and an estimated loss of $150 million for Delta Airlines.
  • In March 2019, a 14-hour outage cost Facebook an estimated $90 million
  • A one-hour outage cost Amazon an estimated $34 million in sales in 2021.
  • A 20-minute crash during 2021's Singles' Day sales cost Alibaba billions.
  • Facebook's 2021 outage cost Meta nearly $100 million in revenue.

Your business may not be as large as the above examples, but downtime can still rob you of valuable resources. And what if its cost is actually increasing? 

What is Downtime? 

Downtime is the idle time when employees are waiting and not actively completing tasks. This is paid time when employees are unproductive. Downtime due to IT problems means your workers cannot access data or programs, reach clients, or otherwise carry out the various tasks that are vital to your business operations. 

What Causes Downtime?

Many factors can result in downtime for your company employees, but Internet and network problems are some of the most common. An unreliable Internet connection or network outage means costly downtime while you struggle to fix the problem and get back online. 

What are the consequences of downtime?

  1. Lost productivity: If employees can't do their work because of an internet outage, this downtime can lead to significant financial losses, particularly for businesses that depend heavily on internet connectivity.
  2. Lost revenue: For businesses that sell products or services online, an internet outage can directly impact sales. Even a short period of downtime can result in significant revenue loss.
  3. Lost customers: Mobile website users are likely to jump if a website has as little as a two-second delay and longer waiting spells certain disaster. Even the slightest delay will cause your customers to choose a different site, and luring them back is a challenge.
  4. Reputation damage: If customers can't access a company's website or services due to an outage, it can harm the company's reputation. This could indirectly lead to revenue loss as customers choose to do business elsewhere.
  5. Costly recovery: After an outage, businesses may need to spend time and resources to restore systems, recover lost data, and address security implications.

Is the Cost of Downtime Increasing?

Is the cost of downtime actually increasing? Take a look at some sobering statistics from just the last three years: 

  • 96% of enterprises experienced an IT outage.
  • The Average number of outages was 15.
  • 51% of IT leaders believe downtime has increased since March 2020. 59% believe this is because of mobile computing. 
  • The frequency is going up but so is the cost. ITIC has reported a 2% year-over-year rise in downtime costs in 2021. As businesses rely more on the Internet for critical functions, this will continue to rise. 
  • Costs to companies who have frequent outages have an estimated 16X higher cost than companies with few outages. With 91% of enterprises reporting downtime exceeding $300,000 per hour. 44% are reporting costs exceeding $1 million per hour. 

What about your company’s downtime losses? Use the MHO Downtime Calculator to run your own quick analysis. 

What is the Best Solution for Reducing Downtime?

The absolute best solution for reducing your company’s IT downtime is incorporating Redundancy and Diversity into your network. Having this and a proper plan for brownouts and outages will ensure a far less likelihood of an outage and in most cases reduce the time of an outage. This can be vital, since there is a substantial difference between an outage that lasts an hour and one that only lasts 15 minutes. 

  • Internet Redundancy is basically having a backup plan and backup Internet service provider. You have two completely different means of connecting to the Internet — such as fiber and dedicated wireless. One is used as the primary connection and the other is the secondary connection. 
  • Internet Diversity involves separating all the factors of how your dual (redundant) Internet connections provide connectivity to your business.

MHO Fixed Wireless solutions for business Internet and networking provide superior reliability you can rely on to keep you up and running more efficiently with vastly reduced downtime. MHO's fast, FCC-licensed, dedicated point-to-point fixed wireless technology keeps your network up and running 99.99% guaranteed

Contact MHO today to learn more about incorporating redundancy and diversity solutions into your IT infrastructure with fixed wireless technology.       

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Topics: Downtime, Customer Experience, Productivity, Network Efficiency, Reliability, IT Planning, Network Outages

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