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The True Cost of Major Incidents

August 29, 2017

Downtime is a serious problem (regardless of size or industry). A recent survey conducted by Information Technology Intelligence Consulting (ITIC), found that:

For 98 percent of organizations, a single hour of downtime costs more than $100,000. 60 percent noted that one hour of downtime costs more than $300,000. And, 33 percent stated one hour of downtime costs between $1 million and $5 million.

And the costs keep rising… 

ITIC also found that the average cost of a single hour of unplanned downtime has increased from 25 percent in 2008 to 30 percent last year. So, if you’re in the $5 million range, that’s close to a $250,000 increase for just 1 hour of downtime. If organizations lack the necessary people, processes, and tools, then the average cost of one hour of downtime will most certainly continue to increase in the years to come. Let’s not forget about the immediate and long-lasting ramifications of downtime, either. Downtime may cause a variety of problems, including:

  • Business Disruption: A network or server outage or similar IT problems can disrupt employee productivity and force a company’s day-to-day operations to slow down or come to a halt.
  • Brand Reputation Damage: Even a system shutdown that lasts only a few minutes may cause customers to lose faith in a company.
  • Data Loss: If a critical application failure leads to a system outage, data loss may occur that can cause legal and financial headaches for a business.
  • Lost Revenue: If a data center outage occurs, telecommunications services providers, ecommerce businesses and other companies that rely on data centers to provide IT and networking support may suffer revenue losses.

To combat outages, organizations first must address the root causes of downtime.

Key Causes of Downtime 

Luke Stone, Google’s director of customer reliability engineering, outlined some of the leading causes of downtime during a breakout session at the 2017 Google Cloud Next conference.According to Stone, the primary causes of downtime include:

  • Overload: When service demand exceeds capacity, errors may occur, causing network, server or system overload.
  • Noisy Neighbor: If users overload a server with spam, they may create excess “noise” that leads to downtime.
  • Retry Spikes: If users are unable to access a service and repeatedly try to gain access, retry spikes may cause a service to shut down.
  • Bad Dependency: If an application’s input and output stop communicating with one another, user requests may accumulate quickly and overload backend systems.
  • Scaling Boundaries: An organization that tries to serve additional client requests may encounter problems if its backend systems lack the proper capacity boundaries.

When it comes to IT outages, it is important for organizations to do everything possible to prevent them from happening. Thanks to AlertOps, organizations can minimize the potential costs and impact of downtime like never before.. . . . . . . AlertOps helps teams manage downtime before it gets out of hand. Our incident management and alert escalation software offers multi-channel notifications, ensuring team members can receive IT incident notifications via email, phone, SMS and other communication methods for fast, efficient response. Plus, AlertOps empowers users with automatic escalations, making it easy to set up escalation groups and workflows to notify key stakeholders about IT incidents. With AlertOps, your organization can improve incident response and reduce downtime simultaneously.

Sources:

http://itic-corp.com/blog/2016/08/cost-of-hourly-downtime-soars-81-of-enterprises-say-it-exceeds-300k-on-average/

http://www.techrepublic.com/article/10-common-causes-of-downtime-and-how-to-avoid-them/

https://www.evolven.com/blog/downtime-outages-and-failures-understanding-their-true-costs.html

 

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