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Just how detrimental is downtime? We reveal all in this insightful article.
Downtime.
This word is enough to make anyone involved with an online business shudder.
Crippling financial impacts. Severe reputational damage. SEO ramifications.
The list goes on.
In fact, statistics around financial losses as a result of downtime are alarming – as you’ll soon read.
With the world gravitating further to the online space, we can expect to witness greater vulnerability to such outages.
In an increasingly competitive digital realm that should ring alarm bells for companies big and small.
In this article, we detail the severe impacts of outages, and their key causes, and reveal important tactics that you can implement within your business to help curb downtime.
As consumers, we can all relate to a scenario where we’ve been on the receiving end of a business closure – whether it’s as simple as to buy a coffee or lunch or to purchase a last-minute gift.
The overwhelming emotions that such an experience elicits are disappointment and frustration, particularly when we anticipated that the physical store would be open.
It’s the same in the digital world. An online outage is like a ‘closed’ sign on a shopfront window.
Worse, it’s a free pass for the competition. Quite simply, customers will more than likely purchase their desired product or service elsewhere – resulting in an immediate loss of sales.
Before we get into the numbers concerning financial ramifications of downtime, let’s start with another key stat.
A massive 80% of data center managers and operators experienced some degree of downtime between 2020-22, according to Uptime Institute.
Here comes the kicker… one in five companies experienced severe downtime that resulted in ‘significant’ damage.
Just how significant? Well…
More than 60% of downtimes led to total losses of at least $100,000 during the period of 2020-22.
Website monitoring service, Pingdom, reports that downtime typically costs small businesses anywhere between $137-$427 per minute.
For larger businesses, downtime can result in losses of more than $16,000 per minute – equating to almost $1 million per hour.
In fact, incidents involving some of the world’s biggest brands highlight the severity of online outages. Here are just a handful of examples:
In summary, Pingdom indicates that downtime costs across all businesses fall somewhere between $2300-$9000 per minute, which can be paralyzing for many organizations.
It’s not just loss of potential revenue in the period of downtime that has a sharp impact on organizations that succumb to outages.
System and website failures create losses and damage that extend well beyond the immediate financial hit.
Here are just some of the flow-on effects resulting from downtime.
As we’ve outlined, if your website is inaccessible, consumers are more than likely to look elsewhere for that particular product or service.
Whether it’s a result of fickleness, a need for that item at that moment, or impatience, consumers are unlikely to hang around waiting for your website to return online.
That spells trouble, particularly if your customers end up having a positive user experience on a competitor’s website.
Such an outcome is likely to lead to repeat transactions with those competitors, rather than your business, severely denting long-term customer loyalty.
Unfortunately, bad news travels fast – particularly in a digital realm dominated by social media channels and online review platforms.
And a rapidfire spread of information about a business’ downtime can significantly tarnish its reputation.
We see time and again irate customers jumping online to share their negative experiences, which erodes brand trust and influences others from engaging with that brand.
Regaining this trust and repairing a damaged reputation is often a lengthy and challenging process, requiring significant investment in time and resources.
Here’s an example of a swift and tangible negative reaction to a downtime event…
In 2017, British Airways had a server outage that cost it approximately $100 million in financial losses – 75,000 of its passengers were stranded on a busy holiday weekend.
But the reputational damage was even more crippling.
Just days after the incident, British Airways owner, International Airlines Group (IAG), lost $215 million in value, with its share price falling by more than 4% in a single day.
This is another factor that demonstrates how financial losses relating to an outage have the capacity to linger.
The extra costs of returning to ‘business as usual’ after a period of downtime can quickly add up.
Whether it’s repairing damaged systems, recovering lost data, or hiring additional staff to handle the backlog of work, these additional expenses can amplify the strain on an organization’s finances.
Moreover, the longer the downtime persists, the greater the cumulative costs become.
Reduced productivity is one of the most immediate and clear impacts of downtime.
When systems are unavailable, employees are prevented from doing their work and/or performing their tasks efficiently, leading to wasted time and resources.
This not only affects individual productivity but can disrupt entire workflows and business processes, leading to delays and missed deadlines.
Over time, such productivity losses can compound, impacting overall business performance and competitiveness.
Outages – particularly frequent ones – can have deep implications for an organization’s online presence and visibility.
Search engines like Google prioritize websites that are dependable – consistently available to users and with minimal load times.
When an organization experiences downtime, its website may become inaccessible to search engine crawlers, resulting in a sharp decline in SEO rankings.
This decline most often leads to a reduction in organic website traffic, further exacerbating the loss of potential customers and hindering the company’s online visibility and growth.
Additionally, tarnishing relationships with partners and suppliers, compliance issues and associated legal risks, and damage to staff morale and retention/recruitment efforts are other common repercussions of downtime.
As we’ve demonstrated, these outages can have long-lasting effects on any business.
There are several factors that can lead to downtime. Here are some of the most common ones:
Whether it’s accidental misconfigurations or data deletions, improper maintenance procedures, scheduling blunders, or mistakes made during system updates, human error is a typical cause of outages.
For example, a technician may inadvertently disconnect a critical component of the network infrastructure, leading to downtime until the issue is identified and resolved.
While incidental human error is a concern, the threat of internal sabotage is also worrying. In fact, it’s common.
The Ponemon Institute’s 2023 Cost of Insider Risk Global Report broke down the causes of insider threat incidents.
Although not related just to downtime, the report found that while 55% of insider threats were due to human error, 25% of these threats were a result of malicious intent. ‘Credential theft’ made up the remaining 20%.
Whether it’s carried out by regular employees, third parties, or privileged users, businesses are clearly vulnerable to downtime and other associated issues as a result of internal sabotage.
It’s not uncommon for software bugs, glitches, or other vulnerabilities to render systems unstable or susceptible to crashes, resulting in outages for troubleshooting and repairs.
Similarly, outdated software that lacks essential security patches and updates exposes organizations to increased risks of system failures and cyber attacks – more on the latter below.
Malfunctions or breakdowns in hardware components such as servers, routers, switches, storage devices, or power supplies can lead to downtime, too.
We’ve all read about cyber attacks on businesses, including many high-profile brands, both in the US and abroad.
Cybercriminals typically exploit vulnerabilities in software or infrastructure to gain unauthorized access to systems, disrupt services, or steal sensitive data.
In the case of a ransomware attack, cybercriminals generally encrypt critical files or systems, rendering them inaccessible until a ransom is paid or the affected systems are restored from backups.
The fallout from these attacks – as well as the likes of malware infections and Distributed Denial-of-Service (DDoS) attacks – can be devastating.
According to online data-gathering platform, Statista, businesses that fall victim to ransomware attacks experience an average of 24 days of downtime following the incident.
Dependence on third-party services, vendors, or cloud providers exposes companies to the threat of downtime if those platforms experience outages, disruptions, or performance issues beyond businesses’ control.
This can create even more frustration and uncertainty for an organization, as often the path to resolution is out of its hands.
Planned downtime is a regular necessity for essential system maintenance, updates, or upgrades.
While planned downtime is typically scheduled during off-peak hours to minimize disruptions to company operations, it can still dent productivity and customer satisfaction.
Additionally, natural disasters, power outages, and environmental factors such as humidity levels, dust, or contaminants within data centers or server rooms are other common causes of downtime.
We’ve established that almost every organization is susceptible to downtime – but there are several ways to prevent outages, or at least tackle the issue swiftly to minimize damage.
In short, this requires a multi-faceted strategy focused on resilience and rapid response. Here are some of the key considerations for reducing the impacts of downtime:
Eliminating this element from existing infrastructure and processes can tangibly reduce the prospect of downtime.
This means actioning the likes of load balancing between servers, following structured backup practices, and implementing technical fail-safes into deployments.
Performing routine and regular maintenance on hardware, software, and infrastructure is an absolute must for identifying and addressing potential issues before they escalate into downtime-inducing problems.
Regularly updating software and implementing patch-management protocols are also essential for reducing the likelihood of downtime caused by software-related issues.
Deploying monitoring tools and systems that continuously track the health and performance of infrastructure is a smart move.
These tools can alert an organization to potential issues or anomalies in real-time.
Similarly, employing redundant systems, components, or backup solutions can be critical to the continuity of operations in the event of a failure or outage.
Regularly conducting load testing and simulations of high-traffic scenarios helps identify potential bottlenecks and weaknesses in a system before they cause serious issues.
Utilizing Content Delivery Networks (CDNs) can also distribute the load, reducing the strain on the main servers and improving site speed globally.
While human error is inevitable, businesses can minimize its effects with thorough training, clear procedures, and by implementing safeguards such as automated monitoring and backup systems.
Educating and training employees on best practices, security protocols, and procedures to minimize the risk of human error-induced downtime also have benefits.
Should downtime occur, having a well-documented incident response plan ensures the company is best placed to act efficiently and effectively to minimize its impacts.
Creating a comprehensive disaster recovery plan – built around outlining procedures for restoring operations quickly and efficiently – is imperative for curtailing the effects of an outage, should it occur.
Then, regularly testing the plan and any other mitigation strategies can ensure they are effective and up-to-date.
Where applicable, make necessary adjustments, based on lessons learned from this testing as well as real-world incidents.
Leveraging cloud-based services and solutions to increase flexibility, scalability, and resilience reduces the reliance on on-premises infrastructure and mitigates the impacts of downtime.
Additionally, adopting a robust cloud infrastructure with auto-scaling capabilities ensures that the website can handle unexpected surges in traffic without causing an outage.
Moreover, choosing a reliable hosting provider can be critical to reducing downtime risks.
In relation to cyber attacks and internal sabotage, applying robust security measures helps to protect against such incidents.
Investing in critical cybersecurity defenses such as firewalls and intrusion detection systems is essential for protecting against online attacks, minimizing the risk of downtime and other damaging consequences.
Introducing strict access controls, conducting employee background checks, and monitoring systems constantly for suspicious activity help guard against internal meddling.
Effectively communicating with stakeholders, and considered planning, can help businesses mitigate the ramifications of planned downtime and ensure a smooth transition back to normal operations.
In summary, taking proactive measures and investing in resilience and redundancy ensure the best chance of reducing the impacts of downtime and maintaining continuity of operations.
Ultimately, this safeguards a business’ reputation, customer trust, and its all-important bottom line.
At RBM Software, we create advanced custom software solutions designed to dramatically boost organizational efficiency and drive tangible growth.
These tailored solutions are built to be resilient and robust, reducing the odds of downtime and minimizing its impacts if an outage is to occur.
Keen to protect your business from the threat of downtime while simultaneously driving growth?
Get in touch with RBM Software today.
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