Enterprise Downtime Costs Average 3.6% of Annual Revenue

Companies participating in a study by Infonetics Research experience significant productivity and revenue losses due to network downtime. The study, titled The Costs of Enterprise Downtime, North America 2004, found that on average, organizations experience 501 hours of network downtime every year, resulting in significant financial losses. The study's author, Jeff Wilson, principal analyst of Infonetics Research, emphasizes that every decision made in relation to hardware selection, product setup, employee training, and service provider SLAs is critical in minimizing downtime costs.

Key Takeaways:

• The average annual downtime cost for companies participating in the study is 501 hours, resulting in significant productivity and revenue losses.
• The study found that downtime costs account for 3.6% of annual revenue, a substantial figure that may surprise many large organizations.
• Every decision related to hardware selection, product setup, employee training, and service provider SLAs is critical in minimizing downtime costs.
• The study examined various types of downtime costs, including lost sales on e-commerce sites, lost employee productivity due to network congestion or misconfigured firewalls, and downtime caused by network products, security products, servers, applications, service providers, cables, and connectors.
• The study identified hardware failure, software failure, and human error as common causes of outages and degradations in all categories of downtime tracked.
• The study and downtime cost analyzer enable organizations selling products and services that reduce downtime to perform cost modeling and cost scenarios and calculate network downtime for prospective customers.
• The study provides in-depth analysis and insights into the causes and costs of enterprise downtime, enabling organizations to better understand and mitigate the risks associated with network downtime.

Statistics:

• Average annual downtime cost: 501 hours
• Downtime costs account for 3.6% of annual revenue
• Total lost revenue and productivity due to downtime: $millions
• Number of surveys conducted: 80 large organizations
• Types of downtime costs examined: 7 categories
• Causes of outages and degradations: 3 categories
• Study and downtime cost analyzer enabled organizations to perform cost modeling and cost scenarios: Yes

Sources:

• Infonetics Research, The Costs of Enterprise Downtime, North America 2004
• Infonetics Research, Infonetics.com
• Jeff Wilson, Principal Analyst of Infonetics Research, Inc.
• Study URL: http://www.info.infonetics.com/