In today’s increasingly wired world, network outages — both limited and total — can deal a devastating blow to your business. And if your business is a small one, it is probably less able to cope financially with the consequences of such outages than would be the case with a larger company.
Whether you lose the link between your headquarters office and an outlying branch office or experience a loss of connectivity throughout your business’s operations, each outage has repercussions that may have a lasting impact on your company.
Consequences of Outages
In its overview of the potential damage that a network outage can cause, Hughes Network Systems LLC lists some of the likely consequences a business might experience:
- No longer able to access the applications and data they need to do their jobs, your employees sit idle and your company’s productivity grinds to a virtual halt;
- The reputation of your business takes a hit when existing and prospective customers as well as suppliers cannot engage with your company’s employees in a meaningful way because access to relevant data has been temporarily lost;
- The loss of sales of products and services that would otherwise be transacted results in a direct decline in revenue. Depending on the magnitude of the network outage, future sales may also be negatively affected;
- In your business’s efforts to work around the network loss, your company will experience unbudgeted expenses associated with the rental of equipment, hiring of temporary staff, travel expenses, and overtime costs.
May Put Data at Risk
Network outages can sometimes expose your business’s sensitive data to outside hackers who gain access during a period when the system’s security defenses are temporarily disabled.
Although the vast majority of data losses associated with network outages are temporary in nature, some network failures may result in the permanent loss of data that has not been backed up on an outside system and thus unaffected by the outage.
While the actual dollar costs of network outages vary widely based on the size of the company and its network, NetworkComputing.com reports that network services’ company MegaPath estimates the average cost of downtime at $212,200 an hour.
For companies that are web- or network-based, that hourly figure can soar to dizzying heights. During an August 2013 network outage that lasted between 30 and 40 minutes, Amazon.com lost between $3 and $4 million.
Human Error a Factor
“The Main Cause of Network Outages and How to Prevent It,” a posting on the blog of BackBox.co, offers some interesting facts and figures about the role that human error plays in triggering many such outages.
“2013 Cost of Data Center Outages,” a survey conducted by Ponemon Institute and sponsored by Emerson Network Power, examines the root causes of network outages among the 67 data centers covered by the survey. The report also offers comparisons between the primary causes of 2013 network outages and those reported in an earlier 2010 survey.
UPS System Failures
Despite the confidence-inspiring nature of their names, the failure of uninterruptible power supply (UPS) systems accounted for 24 percent of all data center outages in fiscal 2013. That represented a significant decline from 2010 when UPS system failures were blamed for 29 percent of all outages.
Accidental/human error accounted for 22 percent of all data center outages in 2013, down slightly from 24 percent in 2010.
In a disturbing sign of the times, cyber-attacks, including distributed denial-of-service (DDoS) attacks, were blamed for 18 percent of 2013 outages, skyrocketing from only 2 percent in 2010.
Network outages caused by extreme weather events showed no change from 2010 to 2013, accounting for 12 percent of outages in each of those years.
Outages caused by water, heat, or computer room air conditioning (CRAC) failures made up another 12 percent of 2013 outages, compared with 15 percent in 2010.
Generator failures caused 7 percent of data center outages in 2013, compared with 10 percent in 2010. The failure of IT equipment accounted for 4 percent of 2013 outages, down slightly from 5 percent in 2010.
Given the negative impact network outages can have on your business, what are you doing to stay connected?
About the Author: Don Amerman is a freelance author who writes extensively about a wide array of business and personal finance topics.