infoTECH Feature

January 29, 2016

IHS Report Describes Devastating Costs of IT Downtime

IHS (News - Alert) recently released a report describing the effects of IT downtime, and the news is not good. In North America, these costs total about $700 billion annually, which is larger than the gross domestic product of all but 20 of the top countries in the world.

Network outages were the most common cause of downtime. Survey respondents reported an average of five disruptions per month totaling 27 hours in downtime. Assuming 40-hour work weeks, and 22 workdays per month, that’s a downtime rate of about 15 percent. For companies that operate 24/7 that rate would be 3.75 percent—still very significant.

One of the problems with calculating the costs of IT downtime is that it’s not easy to define, but no matter which source you cite, the numbers are staggering. Studies have placed the cost at anywhere from $5,600-$7,900 per minute. If you apply these numbers to the average company in the IHS report, that’s about $10 million lost to downtime each month.

That may seem a bit high and admittedly does mix results of different studies to arrive at a new conclusion, but it’s clear that the impact of downtime is something that businesses can no longer take for granted.

Downtime not only has financial implications, but also security ones. A recent study by Globalscape found that when networks go down and users need to distribute work related files, they will use less secure consumer-grade methods like USB drives, or file sharing solutions like Dropbox or Box (News - Alert).net. Seventy-six percent of IT professionals expressed concern over this issue.

IHS respondents stated that they are taking measures like early-detection of network problems, increased redundancy, and alternative low-tech processes that can be performed when IT is down. That’s a good start; and more companies need to adopt such plans.

The business world is more dependent on IT than it ever has before, especially given the popularity of telecommuters and videoconferencing. Businesses that continue to be naïve about the impact of downtime are throwing money away. 




Edited by Kyle Piscioniere
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