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A report conducted by Veeam surveyed more than 1,550 enterprises worldwide “to understand their approach toward data protection and management.” All the surveyed businesses were randomly selected business leaders and ITDMs (IT decision-makers) across 22 countries. Veeam surveyed the companies in early 2020.
The report also analyses how the enterprises are prepared for IT challenges, such as interruptions in service, downtime, IT modernization, and Digital Transformation goals.
Most organizations struggle with obstructions while on their Digital Transformation path due to unreliable legacy technologies. 44% of surveyed enterprises say that a lack of IT skills is also an obstruction to success.
According to the report, cloud availability is becoming a major concern for companies worldwide:
While organizations are already a diverse mix of physical servers (38%), virtual machines (30%), and cloud-hosted VMs (32%), approximately 10% more of onpremises infrastructures will shift to the cloud (such as AWS and Azure) in just two years. This fast-paced switch shows that Digital Transformation has companies adopting a more cloud-friendly ecosystem. Company concerns seem to be consistent, with a lot of thought going toward data and cloud availability, customer experience, and brand impact.
Veamm researchers also presume that companies will significantly increase the secure state of their data and its usability by modernizing data protection via flexible solutions and systems.
95% of Organizations Experiencing Unexpected Outages and Downtime
The survey results reveal that 95% of enterprises are going through unexpected outages, with approximately 10% of their servers having at least one outage per year.
“Considering that the average outage lasts just under 2 hours, while the average for longest outages is more than twice that, downtime is considered by some to be an inevitability,” Veeam says.
This problem’s economic impact should not be underestimated, as one hour of downtime for a high-priority application could cost $61,642. However, since most companies consider 51% of their data to be high-priority, it means that an hour could cost #64,647. These numbers show that most companies are dealing with downtimes that are too long and too expensive. Thus, companies need “a modernized approach” with more recovery points for less downtimes.
“Because when you consider the cost of an hour of downtime can be more than $67,000 per application, any downtime can have significant financial and brand impact to the business,” the report concludes.
Moreover, the economic impact of a downtime is just one aspect of the whole picture, with customer confidence being a top factor. Poor customer experience in 51% of downtime cases is the first reason for damaging a company’s relations with customers.
The second most common negative outcome for surveyed enterprises is damage to brand integrity, caused by 44% of cases. It is noteworthy that customers are not the only ones that suffer because of downtime incidents. Loss of employee confidence is the severe third issue companies are struggling with, with 33% of downtimes being impacted by it:
Employees want their organizations to be profitable, sustainable, and a good place for them to make a career, Veaam points out. But when IT routinely struggles, the rest of the employees can’t do what is required of them — causing some to seek employment elsewhere. Other impacts include diverting resources from long-term or critical projects (23%), subject to legal action (21%), reduced stock price (21%), and revocation of licenses (16%).
Determining the Cost of Downtime in 2024
To determine the cost of downtime for an application in 2024, it’s recommended to consider factors such as:
- Lost Revenue. Calculate the potential revenue loss during the downtime period, especially if your application directly contributes to sales or transactions.
- Productivity Impact. Evaluate the impact on employee productivity and operational efficiency during downtime. Consider the wages of employees who can’t perform their tasks.
- Customer Impact. Assess the potential loss of customers or damage to the brand’s reputation due to a degraded or unavailable application.
- Regulatory and Compliance Costs. In certain industries, downtime may result in non-compliance fines or legal repercussions.
- Recovery and Remediation Costs. Include the costs associated with fixing the issue, recovering lost data, and implementing measures to prevent future downtime.
- Contractual Obligations. Consider any penalties or compensation you may need to pay to clients or partners due to a breach of service-level agreements (SLAs).
In conclusion, recognizing downtime as a multifaceted challenge allows businesses to not only quantify its financial implications but also comprehend its broader repercussions and future outcomes.
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