The cost of downtime

When important systems go down, business processes also fail. A frequent consequence of this is that the impact of system downtime on the IT department may represent only a small piece of the overall shock that system downtime can have on a company's operations.

Downtime falls into two broad categories: planned (what takes place during the maintenance window - backups, system upgrades and the like) and unplanned (a power loss, a disaster and so forth).

Unplanned downtime - by definition, unexpected - always causes the scariest interruptions in IT and business processes. But because some downtime is categorized as "unplanned" it in no way means that it is "unplanned for." We build recovery plans into our operational manuals, and sometimes (but hardly always) our recovery strategies work.

If unplanned downtime represents about 10% of total downtime - not a hard-and-fast rule, but likely to be roughly correct - the other 90% of downtime is planned. This means that 90% of the time our businesses are interrupted, they are interrupted on purpose.

Let's do some math. If we have "three nines availability" (99.9% uptime), that leaves us offline 0.1% of the time, which in a 24-7 business environment equates to 8.76 hours of downtime per year, or about 44 minutes per month. Not much time, right? Except that if we are talking about a system that generates $10,000 of revenue each hour, this means that downtime for this one system costs our company more than $87,000 each year.

Worse, what happens if your CFO ever realizes that 90% of that lost revenue - $78,000 worth - is directly attributable to planned downtime?

At this point you should be asking yourself two questions: First, is the CFO likely to thank me for limiting the potential exposure by building in maintenance windows that take a key system off line? And second, are my systems really offline for only 44 minutes per month?

Minutes-of-downtime is a good metric for IT managers to use, but cost-of-downtime tells a much more important story.

Obviously, any assumption that seeks to represent business losses due to system unavailability must understand the per-hour value of the systems involved. Such impact will of course vary according to industry, company within each industry and application. It is clear, however, that many organizations - and particularly those engaged in large-scale financial transactions or e-commerce - may experience downtime that causes revenue losses of several-thousand dollars (and in some cases, tens of thousands of dollars) for each minute a crucial system is unavailable.

Something to consider with your morning coffee.

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