Downtime: the Cost, Cause and Solution

Posted November 29th, 2007 by Joe Pendry

Next week Jonah Paransky, the VP of marketing here at StackSafe will begin a series of posts about quantifying the cost of downtime. He has some interesting data based on our own research as well as from his past experiences with Symantec. Starting with top questions about the cost of downtime, he’ll then discuss three approaches to quantifying staff hours lost due to unplanned downtime, how to handle unplanned revenue loss, loss of productivity, dealing with reputation damage, and finally how to annualize the per incident downtime costs into the total annual cost of unplanned downtime.

Before we get to that, however, I wanted to discuss the business impact of downtime for companies. According to an article by Kerri Meyler via NetworkWorld, the average cost of downtime for a company is close to $24,000 for a six-hour outage. In addition to the overall potential revenue loss, outages can cause customers to shift their loyalty to a competitor. If you are having problems accessing a website or completing your purchase online, then why not check out a competitor whose website IS up and running?

What causes downtime? Our research shows that most headaches result from application changes (60%), hardware problems (21%), connectivity problems (16%) and other (3%) factors. Application changes include software patches, new releases, custom changes, emergency changes and inadequate testing. Although predicting how these changes will impact the organization, you can take measures to prevent them from occurring in a live situation by developing virtual testing environments to give time for plenty of “practice runs.”

If companies are prepared to lose potential customers and revenue, then the cost of downtime is not that relevant, and just a part of the business cycle. But the real question is, if downtime can be prevented, why risk it? Today’s testing solutions are more cost effective.