The Cost of Downtime

By: Bob Landstrom

Availability Performance
In another post, we talked about the term “Availability” and what it means to have say, three 9s, four 9s, and so on.  We also noted that true availability performance (that is, what you will see from your data centre provider) is not based solely upon engineering and certifications, but also requires superior operational processes and disciplines.  A skilled and well trained data centre operations team, mature MOPs & SOPs, disciplined security processes, and superior engineering combine to ensure superior availability performance.

Availability, and Meeting Service Levels
Availability is critical to meeting service levels, processing data in a timely way, and simply being present to serve your customer. The table below lists a few of the service level challenges faced by businesses in various industry segments.

Industry Challenges
Brokerage The ability to maintain continuous trading, settlement, and customer service operations
Financial Institutions The ability to maintain compliance, continuous banking operations, and customers’ trust
Public Safety The ability to secure the well-being of the community
Consumer Products The ability to maintain an operational supply chain, brand value, and product quality

The ability to maintain continuous supply chains, store operations, and customer support


The ability to maintain continuous life support systems and staff communications.

The ability to maintain integrity and availability of patient data

Media The ability to maintain continuous production operations and access to content, editorial, broadcasting and publishing

The Cost of Downtime
Regardless of the industry, downtime has a cost.  In fact, we can quantify the cost of downtime by mapping the amount of revenue per period of time with a given type of business. 

Here is some data about the industry average amount, in Euros, lost due to just a single hour of downtime, according to industry segment.

Typical Hourly Cost of Downtime by Industry (in Euros)*
Brokerage Service 4.8 million
Energy 2.1 million
Telecom 1.5 million
Manufacturing 1.2 million
Retail 800,000
Healthcare 476,000
Media 67,000

The costs shown in the table account for revenue lost during an outage.  It’s important to note that loss of revenue can continue after an outage is resolved.  Downtime of business critical applications can affect the brand and reputation, softening customer activity in a sustained way. A recent study, for example, shows that 26% of female and 17% of male online gamers are unlikely to return to a game after experiencing a glitch or crash. With numbers that high, even a couple of hours of downtime can significantly affect your customer base. In the digital age, user expectations are high, and uptime is a huge factor in meeting those expectations.

Regardless of how the impact is estimated, all critical business applications carry a cost of downtime.  This is a risk to be mitigated, at least in part, by selecting a data centre service provider with a strong track record of high availability performance, along with evidence of mature and disciplined data centre operations.

*Source:  Network Computing. The Meta Group and Contingency Planning Research