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The true cost of downtime

The true cost of downtime (Photo credit: Thinkstock/ Image Source)

Downtime – a period in which a company cannot operate to its normal capacity due to a technological failure – is not only an annoyance, but can also be extremely costly.

Here, we're going to look at the true cost of downtime for firms, while detailing how our Inventory & Management System (IMS) could help this to be reduced significantly for telecom service providers in the future.

Many reports into the financial implications of downtime have been carried out in recent years, all with slightly different conclusions, but one thing they do all agree on is that it needs to become a notion of the past sooner rather than later to prevent firms from losing money, especially in a tough economic climate.

The results of a study carried out in late 2013 by the Ponemon Institute and sponsored by Emerson Network Power priced the cost of downtime for US companies at $7,900 (€6,134 or £4,762) per minute, which is not only a significant sum, but also indicates a rise of 41 per cent from just three years earlier.

Chairman and founder of the Ponemon Institute Larry Ponemon commented: "Given the fact that today's data centers support more critical, interdependent devices and IT systems than ever before, most would expect a rise in the cost of an unplanned data center outage compared to 2010. However, the 41 per cent increase was higher than expected.

"This increase in cost underscores the importance for organizations to make it a priority to minimize the risk of downtime that can potentially cost thousands of dollars per minute."

CA Technologies also attempted to calculate the financial implications of downtime in its own report, carrying out a survey that found companies in the US experienced an average of 14 hours of downtime each year, with 18 per cent describing this as "very damaging" for their reputation.

Vice-president of product management at CA Technologies Steve Fairbanks explained: "A lot of times, companies don't fully understand the cost of not preparing, so as a result, they are not willing to spend dollars to ensure disaster doesn't occur, or they can recover quickly from a disaster."

Therefore, in light of the findings of both of these investigations into downtime and its implications, it is clear that firms relying on technology need to make sure they are adequately prepared should a technical disaster strike.

Here at VC4, our IMS product can help to reduce costly downtime for businesses, as its Single Point of Failure (SPOF) calculation assesses the network to identify part(s) of a network which, if it fails, will stop one or multiple (customer) services from working. In addition, its fault-handling and trouble ticket capabilities mean issues can be dealt with quicker within the system, before they manifest into bigger, more expensive problems. 

IMS has the ability to automatically carry out a variety of tasks, with SPOF analysis one of the most important in relation to preventing downtime. 

Users of the software can properly plan network changes in the system in combination with Automatic Planned Work Analysis to verify which customer services will be affected, once again helping to stop costly downtime from occurring.