The Cost of Network Downtime

Author
Terry Slattery
Principal Architect

I was doing some research on the costs and causes of network downtime and came across a more recent white paper than the information from 2001 that I had previously found. This paper, The Impact of Network Downtime on Business Today, was done in 2007 by Networks First, in conjunction with Warwick Business School. It shows statistics from nine different industries. The cost of an hour of downtime ranged from a low of a few thousand dollars (the study was in British Pounds, so I’m converting to approximate dollars) to over $600,000.

The prior costs I had seen were pretty old, from an Infonetics study The Costs of Enterprise Downtime 2003, which studied the costs of six organizations in different industries. It is generally straight forward to determine the costs of downtime. The major factors are:

  • Hourly cost of staff time in terms of lost revenue (this is lost sales; one calculator also included the cost of lost sales, which is a component of lost revenue, so think carefully about what goes into the calculations)
  • Hourly cost of staff salary, benefits and facilities
  • Hourly rework costs to make up for the lost time
  • Customer dis-satisfaction

There are a number of calculators available on the ‘net that allow you to enter estimates for the parameters to calculate the cost of downtime. Sometimes you will find them along with a product that claims a reduction in downtime and an ROI calculation from purchasing and using the product.

You can easily do your own calculations on ROI, based on what you know about your network’s reliability. That’s where the real value lies in using one of these calculators. The vendors using a calculator to determine ROI are speculating about a network outage that their product could have eliminated. But a clearer ROI originates from improving a network’s current resilience (see my prior post Network SLAs – Which one to use? If your network is 5-nines (99.999% available), you have about 5 minutes of downtime per year. But a network of 3-nines (99.9% available), you have 500 minutes of downtime a year. There is a direct ROI if you can reduce your downtime each year through the use of network management tools, processes, and people to implement them. Just think of the ROI of changing your network management methodology to reduce the downtime by 50%. In my 3-nines example, it avoids just over four hours of downtime. That is some serious savings and can easily justify a good NMS tool like NetMRI.

-Terry

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Re-posted with Permission 

NetCraftsmen would like to acknowledge Infoblox for their permission to re-post this article which originally appeared in the Applied Infrastructure blog under http://www.infoblox.com/en/communities/blogs.html

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Nick Kelly

Cybersecurity Engineer, Cisco

Nick has over 20 years of experience in Security Operations and Security Sales. He is an avid student of cybersecurity and regularly engages with the Infosec community at events like BSides, RVASec, Derbycon and more. The son of an FBI forensics director, Nick holds a B.S. in Criminal Justice and is one of Cisco’s Fire Jumper Elite members. When he’s not working, he writes cyberpunk and punches aliens on his Playstation.

 

Virgilio “BONG” dela Cruz Jr.

CCDP, CCNA V, CCNP, Cisco IPS Express Security for AM/EE
Field Solutions Architect, Tech Data

Virgilio “Bong” has sixteen years of professional experience in IT industry from academe, technical and customer support, pre-sales, post sales, project management, training and enablement. He has worked in Cisco Technical Assistance Center (TAC) as a member of the WAN and LAN Switching team. Bong now works for Tech Data as the Field Solutions Architect with a focus on Cisco Security and holds a few Cisco certifications including Fire Jumper Elite.

 

John Cavanaugh

CCIE #1066, CCDE #20070002, CCAr
Chief Technology Officer, Practice Lead Security Services, NetCraftsmen

John is our CTO and the practice lead for a talented team of consultants focused on designing and delivering scalable and secure infrastructure solutions to customers across multiple industry verticals and technologies. Previously he has held several positions including Executive Director/Chief Architect for Global Network Services at JPMorgan Chase. In that capacity, he led a team managing network architecture and services.  Prior to his role at JPMorgan Chase, John was a Distinguished Engineer at Cisco working across a number of verticals including Higher Education, Finance, Retail, Government, and Health Care.

He is an expert in working with groups to identify business needs, and align technology strategies to enable business strategies, building in agility and scalability to allow for future changes. John is experienced in the architecture and design of highly available, secure, network infrastructure and data centers, and has worked on projects worldwide. He has worked in both the business and regulatory environments for the design and deployment of complex IT infrastructures.