What Is Network Downtime?

When your network connections fail or the system is unable to complete primary functions such as connecting to the IoT and accessing web satellites, that is known as network downtime—the bane of businesses everywhere.

The causes of network downtime are wide-ranging, but always cause some level of disruption to a company’s normal workings.

While this issue does depend largely on the circumstance for how long it will last, network downtime can be temporary, intermittent, or even left without the ability to operate for a longer period of time if something has gone terribly wrong.

Network downtime also looks different depending on the sector of your business.

For instance, your sector is in communications, network downtime can manifest in phone lines not working or other transmission breakdowns. If your off-the-shelf sales company experiences network downtime, you might experience issues with your POS terminals.

It’s likely that we have all experienced network downtime in our lives, whether we are part of the company that it happens to or the client who is faced with the consequences of it.

And while downtime can be planned to accommodate IT repairs or other systems updates, human error causes most unplanned network downtimes, as up to 97% of people agree.

But did you know that network downtime not only brings irritation and delays for everyone involved, but it also costs companies a substantial amount in business losses? Let’s take a closer look at this part of the issue of downtime.

The Cost of Network Downtime

Because any instance of unplanned downtime essentially means that all connections and normal network functions are suspended during a variable period, it follows that companies are faced with unnecessary expenditures that are not covered by continued business for that time.

And the costs of network downtime are surprisingly high—on average, companies can lose up to $5,600 per minute of downtime, which adds up to over $300,000 every hour.

That is just an average, as well. Depending on the type of business and its company function, the costs can be much higher.

Let us extrapolate this further: a company on the lower end of the financial scale could lose around $140,000 per hour of downtime (which is still a substantial amount). But a high-earning business could face losses of up to $540,000 for every hour the network is down. And for 33% of enterprises polled, a staggering $1 to $5 million could be lost per hour of network downtime!

You might be wondering—why are these costs so extensive when it comes to company network downtime? We can break it down into four areas of revenue loss, which accounts for the surprisingly high cost of network downtime, as seen here:

Lost Revenue
If the network is down, companies cannot complete necessary transactions or pursue their business proceedings as usual. This inevitably leads to a major loss of profits, as every minute of network downtime prevents a company from garnering sales or providing billable services to clients. Frequent downtime can even lead to fewer repeat customers.

Lost Productivity
When system outages and network downtime happen, it leaves employees unable to perform sales tasks or complete proper services for customers. As a result, employees will still be paid, but for time that is not providing revenue to the company. In other words, this is an example of lost productivity.

Recovery Costs
If there is something seriously wrong with the network system, it could take an IT team a significant amount of time to diagnose and fix the problem before the company is able to reinstate normal work and revenue processes. Not only can this lead to paying overtime to IT workers, but it also incurs replacement and repair costs to boot.

Intangible Costs
Along with the more noticeable issues such as slowing of service, halting in sales, and other apparent problems, significant or repeated downtime can have more intangible effects on a company as well. This includes a reduction in customer loyalty due to closures, and even decreased confidence in the company, leading to less competitiveness within the sector.

Thus, between all of these costs that are lost to every minute of network downtime experienced, the total price of downtime ranges between $137 to $17,244 per minute. And while some companies can make up for such losses with renewed sales, repeated downtime is occasionally enough to force other businesses into closing.

How to Avoid Network Downtime in Business?

Because network downtime is so costly for businesses, it’s something that should be avoided as much as possible. And while a few minutes of internet outage might not seem like the end of the world, it adds up quite quickly.

To avoid these figures from happening to your company due to network downtime, it’s essential to be proactive with the systems and take steps to prevent this issue from occurring. This includes the following best practices:

Scheduled Maintenance and Updates Regularly
One of the most important aspects of reducing the likelihood of network downtime is performing regular system updates and maintenance, getting ahead of problems and working to prevent issues.

Network Monitoring
A variety of network monitoring tools are available to companies and their IT departments, provided by many Houston IT Services, allowing you to keep a close eye on your network systems’ performance

Server Testing
By running scheduled server testing, your IT team can make sure they are running properly and avoid possible failures.

Perform Facility Tests
Hardware and software are essential parts of your company’s network facilities and infrastructure and keeping them up-to-date, virus-free, and with a reliable backup source is key.

Partner with an Outsource IT Support Partner
Estimates vary, but annual downtime for an IT system might cost billions when measured collectively among enterprises. To avoid overloading a company’s own IT team that might not be prepared to deal with such outages, outsourcing to an IT support partner is advised, such as Managed IT Services Houston.

Network downtime is a problem for many businesses, but by understanding the issues and why they arise, companies can strive to avoid them in the first place!