1 hour of Downtime for a High-Priority Application Costs $61,642

A new 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 different countries. The survey was conducted in early 2020.

The report also analyses the way the enterprises expect to be prepared for IT challenges, such as interruptions in service, downtime and goals of IT modernization and Digital Transformation.
Apparently, most organizations are being obstructed while on their path of Digital Transformation due to unreliable legacy technologies. 44% of surveyed enterprises say that 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 by modernizing data protection via flexible solutions, companies will greatly increase the secure state of their data as well as its usability.

95% of Organizations Experiencing Unexpected Outages and Downtime

The survey reveals 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.

The economic impact of downtime 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 of downtime could cost #64,647. These numbers simply 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 downtime.

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, which was caused by 44% of downtime cases. It is noteworthy that customers are not the only ones that suffer because of downtime incidents. Loss of employee confidence is the third serious 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%).

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