What is the Cost of Downtime for Businesses?

//What is the Cost of Downtime for Businesses?

What is the Cost of Downtime for Businesses?

When you have an IT failure – such as a server or network infrastructure failure – your downtime can cost you more than lost data. When this kind of thing happens, a large percentage (if not all) of your company’s productivity could come to a grinding halt. At that point, you have to consider how much you’re paying your employees per hour while they cannot do their jobs and bring in revenue.

Then you have to consider how much revenue you lose from being unable to operate, and beyond that you have to consider how much potential revenue you lose based on damage to your reputation. Let’s take a look at what it actually costs your business when you cannot operate, and with that information you can determine just how valuable managed IT services and IT support in Miami can be.

Downtime Costs Then and Now

According to an Information Week article from 2011, in 2010 businesses lost a total of $26.5 billion in revenue from downtime alone. That figure meant that, five years ago, individual businesses were losing approximately $150,000 per year due to downtime caused by IT failures and outages. When you consider that we have grown no less dependent on technology to keep our businesses running since then, you can see how this figure should be a revelation.

And, though managed IT services have minimized the amount of downtime that many companies experience each year, those numbers have only been increasing over the past years. In 2010, for example, the estimated cost per minute of downtime to most businesses was a striking $5,600. However, just four years later, that number had risen to a full $7,900 per minute.

If you think that those kinds of losses are relegated to large corporations that make millions upon millions of dollars per year, you couldn’t be farther from the truth. According to the same study from 2014, when a company like Amazon has an outage, its losses are over $66,000 per minute.

Of course, while you can expect your small to medium sized business to lose a significantly smaller amount of money during an outage, the relative cost is actually very similar, especially if you rely on online sales for revenue. Let’s take a moment to determine how you can come up with a good estimate of the cost to your specific company during an outage.

Determining Your Revenue Loss During an IT Failure

If your company conducts most or all of its sales online and depends entirely on being online to do business, you’ll only need a simple equation to determine your losses per minute during an outage. Basically, you’ll divide your annual corporate revenue by 525,600 (the number of minutes in a year). Then multiply that number by the number of minutes your outage lasts, and you have your total revenue loss due to the failure. This does not, however, cover the cost to you in lost employee productivity, data recovery, or reputation damage. The true cost of an outage to your company is the sum of all of those figures.

You can see how your costs can be significantly more than you originally anticipated during an outage, but you may be wondering if this is really something that you should be concerned about for your company. After all, can you really expect to experience that many outages?

Minimizing Outages to Minimize Costs

On average, surveyed businesses have reported an estimated 14 hours of downtime due to IT failures. If you did the math to figure out your cost per minute for a failure, try multiplying that number by 840 (the number of minutes in 14 hours). If you haven’t done the math yet, let’s assume that your company is near the average cost of $7,900 per minute. If you also experience the average 14 hours of downtime per year, your lost revenue is an estimated $110,000 per year due to IT failures alone.

When a single, preventable issue costs a company six figures each year, it’s time to look into solutions. This is where managed IT services come in. When you hire a qualified company for IT consulting in Miami, you’ll get a full, free IT assessment, including a report on your system’s overall health and recommendations for the best course of action for your company to reduce outages and improve your IT infrastructure.

Through cloud backup for your services, you can minimize the cost of data recovery because all of your data will be backed up off-site and will not be dependent on your hardware to survive. At the same time, with a more robust IT infrastructure, you can expect fewer outages and less downtime during those outages.

Managed IT Services Bolster Your IT Infrastructure

When you hire a quality managed IT services company, you’ll get more than just tech support. With monitoring software installed on your network, employee workstations, and other relevant devices and backup equipment, they will often get alerts before you or your employees even notice that there is a problem. This way they can prevent outages before they occur. And, when outages do happen, they can deploy their expert technicians to solve the problem, recover your data, and get you back online in record time.

Imagine feeling completely secure in your company’s technology, knowing that you are covered and will be in great hands if a problem occurs. At Preemo, we specialize in giving our clients the very best IT support in Miami. We minimize outages and get you back online fast with your data intact, preserving your business continuity, whenever they do occur.

Want to know why our clients choose us? Check out what they have to say in their own words on our testimonials page. Then, when you’re ready for your free IT assessment, call us at 305-669-6049 or email us at info@Preemo.com. We can’t wait to streamline your IT services and help you gain more revenue this year through fewer outages and less downtime.

 

By |2018-07-17T21:32:31+00:00May 5th, 2016|Blog|Comments Off on What is the Cost of Downtime for Businesses?

About the Author:

Ashley Brown joined Preemo in 2011 as Marketing Coordinator. She's an expert in marketing for IT Companies and Managed IT Support. In her free time, she enjoys running, and hanging out with her dog in Brickell.

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