The cost of downtime

Communications News, April, 2004

Companies experience an average of 501 hours of network downtime every year, and, as a result, are losing millions of dollars in annual productivity and revenue, according to a study conducted by Infonetics Research.

"Overall downtime costs average 3.6% of annual revenue, a significant number, and one likely to surprise many large organizations," says Jeff Wilson, principal analyst of Infonetics Research (www.infonetics.com) and author of the study, titled The Costs of Enterprise Downtime, North America 2004. "We've been doing this study for years, and what we found this year is that there isn't any one problem area that organizations need to focus on; there's no simple fix. Every decision is critical, from hardware selection to product setup, from employee training to service-level agreements with service providers."

Application problems are the single largest source of downtime in the study group, causing 30% of annual downtime hours and 32% of downtime cost, on average. The leading cause of application downtime is software failure (36% of cost on average), followed by human error (22%). Other sources of downtime include network products, security products, servers, service providers, cables and connectors, and e-commerce.