Infrascale Survey Reveals the Negative Impact of Unexpected Downtime

According to new research from Infrascale, the IT systems of almost a quarter of small and medium businesses (SMBs) have gone offline in the past year. SMBs stated the downtime that results from going offline creates disruptions to day-to-day business operations and decreases employee productivity. Over a third (37 percent) of the SMBs surveyed said they have lost customers and 17 percent have lost revenue to unexpected downtime. The research from Infrascale is based on a survey of over 500 C-level executives at SMBs. CEOs represented 87 percent of the group, with most of the remainder being split between CIOs and CTOs.

The research from Infrascale revealed that 19 percent of SMBs do not feel they are adequately prepared to manage and prevent unexpected downtime. Of the SMBs that feel unprepared, 13 percent stated they feel unprepared for unexpected downtime because they do not have enough time to research solutions designed to prevent downtime. 28 percent feel unprepared for this scenario due to IT teams at their business being stretched too thin. The same share (28 percent) do not think their organization is at risk from unexpected downtime. However, 38 percent of SMBs said they don’t know what the cost of one hour of downtime is for their business.

In a media statement, CEO of Infrascale, Russell P. Reeder said, “customer retention is essential for business success. It can cost up to five times more to attract a new customer than to retain an existing one, and when customers leave, businesses lose out on vital profit and operational efficiencies. Especially in today’s competitive environment, it’s challenging enough to retain customers. With all the cost-effective solutions available, downtime shouldn’t be a reason for concern.”

Loss of Business

As mentioned above, 37 percent of those surveyed admitted to losing customers because of downtime issues. This problem was especially prominent among business-to-business (B2B) entities. Almost half (46 percent) of B2B organizations have experienced such a loss. On the other end of the spectrum, 25 percent of business-to-consumer (B2C) SMBs stated they have lost customers due to downtime issues.

Loss of Productivity

The SMBs surveyed said the biggest downtime risks are business disruption (29 percent) and decreased employee productivity (21 percent). Additionally, 17 percent have lost revenue, with reputation impact (16 percent) and cost (13 percent) rounding out the responses. Software failure (53 percent) and cybersecurity issues (52 percent) are the most common causes of downtime according to the survey group. A smaller share of those surveyed blamed downtime on hardware failure (38 percent), human error (36 percent), natural disaster (30 percent), and/or hardware theft (24 percent).

Financial Loss

One-tenth of SMBs said their per-hour downtime cost was over $50,000. 13 percent said their per-hour downtime cost was between $40,001 and $50,000. A quarter of those surveyed said their per-hour cost of downtime was between $20,001 and $40,000. 26 percent incur a loss of $10,000 to $20,000 for each hour of downtime, while 27 percent stated their cost of downtime per hour was less than $10,000.

Luckily, the survey group indicated that downtime usually only lasts minutes rather than hours. 22 percent of respondents said their downtime events last between five to 15 minutes. 17 percent said their downtime typically goes on between 15 and 30 minutes. 17 percent said their downtime can last an hour, and only 6 percent said over an hour.

Reeder continued, “these survey results illustrate that there’s plenty of room for improvement when it comes to business uptime. Organizations can benefit from application and server backup, ransomware mitigation, Disaster Recovery as a Service (DRaaS), encryption, and state-of-the-art endpoint protection. Investments in such solutions enable them to avoid downtime and enjoy business continuity, which are essential for a growing and thriving business.”

Learn more about Infrascale.