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The Cost of Downtime Explained in 7 Ways

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A recent survey found that 40% of small and midsize businesses (SMBs) experiences 8 or more hours of downtime due to a severe security breach within the past year. According to the National Cyber Security Alliance, 60% of SMBs who experience a significant data breach go out of business within six months. The highest cost of an unplanned outage is more than $17,000 per minute. The average cost per minute of an unplanned outage is nearly $9,000 per incident. These statistics are sobering. For many SMBs, however, the risks still feel foreign and not something that warrants action. To protect your business requires some knowledge and good advice, intent, action, small investments.

It is easier to rely on myths such as, “We are not a target for cyber attackers”, “We can run on pen and paper until we recover”, and “Our customers will understand” than it is to assess your risks and take action. Nevertheless, the risks are real and the number of SMBs hurt by downtime continues to rise.

The cost of downtime can vary depending on the size of the organization, the industry, and the nature of the downtime. Downtime can be caused by various factors such as power outages, network failures, software issues, or hardware failures. In today’s world, it’s essential to streamline security if you’re a SMB, and understand the consequences downtime can have on your business.

Here are seven ways downtime can damage your business:

1. Monetary Cost

Downtime leads to lost sales and lost productivity impacting top-line revenue and your bottom line. These costs hit your pocket in addition to the cost of recovery and returning to normal operations. If you need to calculate the average cost of downtime, our specialists can help.

2. Customer Trust

When you are unable to serve your customers, they lose faith in your business. While downtime for natural disasters is understandable, today’s customers have little tolerance for disruptions due to cyber attacks and breaches. Lost trust means lost customers.

3. Brand Damage

Your brand identity and reputation drives customer loyalty and growth. Service disruptions from technology failures or breaches sends a message that your business may be poorly managed and is unreliable. These messages lead to loss of goodwill and create negative impressions of your business in the minds of your customers.

4. Employee Morale 

Disasters due to data loss or breaches means employees need to perform double duties. Employees spend time on recovery while working to keep the business operational. It often requires additional work hours. Recovery can be stressful and demoralizing.

5. Business Value 

Businesses that suffer data breaches and service disruptions are perceived as poorly managed. With the potential financial liability, public companies can see stock prices fall. All companies can suffer a loss of business value.

6. Legal Action

Downtime creates the risk of legal action. This is particularly true for downtime that is perceived as preventable. System failures, data loss, security breaches, and other incidents can put your business in breach of contract. You may also be in violation of state and federal regulations, making proper data protection and security vital.

7. Compliance Fines & Penalties 

As information privacy and security regulations expand, data loss and breaches create the real potential for fines and penalties related to regulatory compliance, privacy, and data retention requirements.

These risks carry the potential for lasting damage. Whether by increased financial burdens or winning back customers, the impact of downtime extends well beyond getting yourself up and running again.

Is your business worth protecting?

Protecting your business will not break the bank. We offer practical, affordable cloud infrastructure solutions that help you and your team understand the risks, prevent problems from happening, and continue operating in the event something bad does happen.

If your business is worth protecting, contact us for a complimentary Cloud Advisor session to discuss how we can improve your business’ resiliency.

 

“Deja Vu?” or “Have We Learned Our Lesson?”

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Hurricane Matthew as of 2pm on Oct 4th

Hurricane Matthew as of 2pm on Oct 4th

As of this blog post, Hurricane Matthew is churning through the western Caribbean with a projected path eerily similar to Superstorm Sandy in 2012. In its wake, Sandy left a path of destruction up the East Coast and deep into New England with many families and businesses still in the process of rebuilding. Small and mid-size businesses (SMBs) up and down the eastern seacoast were crippled by flooding, loss of infrastructure, and extended Internet and power outages; many were unable to recover.

Could this be a devastating Deja Vu, or did we learn our lesson?

Have you ensured that your information services and data will survive the next storm? Do you know how quickly your business can recover if (more like when) the next storm hits?

Path of Superstorm Sandy in 2012

Path of Hurricane Sandy in 2012

These questions feel more pressing as our next potential big storm churns towards Florida.

Good. Better. Best.

Your “Good” strategy is Backup. Ensure that you back up all of your critical data. Backups should be off site to a service that lets you restore to new systems quickly and efficiently.

Your “Better” strategy is Recovery. In addition to backups, ensure you have the ability to recovery quickly to new systems or to a temporary data center. When your  Return to Operations (RTO) time lets you continue running your business without significant impact to you or your customers, your recovery plan is sound.

Your “Best” strategy is Resilience. Your business is resilient when you can continue running your business with minimal disruption and with little or no inconvenience to your customers, regardless of the weather outside. By placing key applications and services in the cloud, your business can continue to run whether or not your office is open. With Internet access and a browser, your team can connect and work. And while you still may have some aspects of your IT running on premise, a solid cloud strategy keeps critical systems available and operating.

Resiliency Roadmap

For most SMBs, you should consider having the following services hosted or in the cloud. Depending on your applications and needs, you can use Software-as-a-Service (SaaS) solutions or host your applications on cloud/hosted servers with virtual/remote desktops.

  • Communications
    • Email / Calendar / Contacts
    • Telephony — cloud/hosted Voice over IP (VoIP)
    • Messaging / Voice & Video Conferencing
  • Collaboration
    • File Storage & Sharing
    • Productivity Tools (document, spreadsheet, presentation editors)
  • Key Business Apps
    • Customer Relationship Management (CRM)
    • Account / Finance
    • Service / Support
    • Others …

Creating a Resilient business requires strategic thinking, advanced planning, and solid execution. This is especially true when you have integrated applications and systems that you cannot change in isolation. At a high level, the roadmap is:

  1. Identify the applications and services
  2. Prioritize all applications and services based on the impact in the event of a service outage. Look outward and inward, remembering to consider customer impact.
  3. Starting with your highest priority applications and systems, evaluate if your level or protection: Backup, Recovery, or Resilient protection.
  4. Identify and implement solutions that take you from Backup to Recovery, from Recovery to Resilience, or from Backup all the way to Resilience.
  5. Repeat as you move through your prioritized list.

While you may not have time to make your business Resilient before Hurricane Matthew works its way up the coast, you have options to improve your backups and your ability to recover that can be implemented within hours rather than days and weeks. Think about the value of keeping your business running and ensuring its survival. Act now.

Contact us immediately if you want assistance with your backup, recovery, or resiliency services.