Businesses Lose $700 Billion Each Year to IT Downtime

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In its latest "The Cost of Server, Application, and Network Downtime: North American Enterprise Survey and Calculator," IHS Inc. revealed that, in aggregate, information and communication technology (ICT) downtime is costing North American organizations $700 billion per year.

The report explores the frequency, length, cost and causes of ICT downtime experienced by North American organizations, such as server, application, and network outages or degradations. It includes a companion downtime calculator that enables the cost of downtime to be modeled based on company demographics, cost structure and downtime profile.

“Our research found that the cost of ICT downtime is substantial, from $1 million a year for a typical mid-size company to over $60 million for a large enterprise,” said Matthias Machowinski, research director for enterprise networks and video at IHS.  

“The main cost of downtime is lost productivity and revenue. Fixing the problem is a minor cost factor, which means a small investment in increasing the reliability of ICT systems will provide an outsized return by reducing productivity and revenue losses,” Machowinski said.

DOWNTIME SURVEY HIGHLIGHTS

• Network interruptions are the biggest culprit of downtime and have far-reaching consequences: applications, servers and devices may all be working fine, but they can’t communicate with each other when the network is down
• On average, survey respondents experience 5 downtime events per month, and 27 hours of downtime per month
• Organizations are making changes to reduce the impact of downtime, from investing in early-detection capabilities to improving redundancy, training and hiring new people, and implementing backup processes that don’t rely on ICT systems

ABOUT THE REPORT

For its network downtime survey and calculator, IHS interviewed IT decision-makers at 400 medium and large organizations in North America that use information and communication technology (ICT) — ERP systems, databases, email, VoIP systems, etc. Respondent organizations hail from a variety of industry verticals, led by manufacturing and the financial services industry, both large verticals and big adopters of ICT. Healthcare respondents also made a significant contribution.

About IHS 

IHS is the leading source of insight, analytics and expertise in critical areas that shape today’s business landscape. Businesses and governments in more than 140 countries around the globe rely on the comprehensive content, expert independent analysis and flexible delivery methods of IHS to make high-impact decisions and develop strategies with speed and confidence. IHS has been in business since 1959 and became a publicly traded company on the New York Stock Exchange in 2005. Headquartered in Englewood, Colorado, USA, IHS is committed to sustainable, profitable growth and employs approximately 8,600 people in 32 countries around the world.