Working in the Dark: Most Companies Don't Know the Financial Impact of Downtime on Their Business

MAYNARD, MA--(Marketwire - Dec 6, 2011) - While most companies today rely heavily on IT, a new semi-annual survey from Stratus Technologies and ITIC Corporation reveals that 52 percent of businesses do not know the potential financial impact of IT downtime. The survey results underscore that many companies are unaware of the devastating impact that downtime can have on their bottom line and their reputation. Additionally, even though 48 percent of companies currently calculate the cost of IT downtime, most still drastically underestimate the actual costs of outages, the ensuing remediation efforts, customer dissatisfaction, and the increased potential of litigation.

"It's shocking that so many businesses have no idea what their cost of downtime is," said Roy Sanford, chief marketing officer at Stratus Technologies. "Equally surprising is the fact that people who claim to measure downtime cost fail to include major cost contributors in their calculations. Studies have shown that a high percentage of companies are doomed to failure following periods of extended downtime of a week or more. There are so many ways that IT downtime can hurt businesses, from lost revenue to reputation damage to lost productivity. One quarter of the businesses we surveyed, for example, failed to factor in lost manpower hours. They are making technology and staffing decisions without having full awareness of the actual financial impact that IT downtime can have on them."

Inside the Survey

• 35 percent of survey respondents believe that one hour of downtime for their most business critical applications will cost their company $25,000 or less, potentially underestimating the adverse impact that IT downtime can have on their entire businesses.
• Just 10 percent of survey respondents report financial impact of $150,000 or greater per hour, which is closer to most industry cost estimates -- e.g., the Aberdeen Group's estimate of $110,000 an hour for the average company.
• Customer dissatisfaction and a bad reputation can have an insurmountable impact on a company's bottom line and long-term success -- but 29 percent of survey respondents do not consider customer dissatisfaction a factor contributing to their cost of IT downtime. Meanwhile, 38 percent of businesses do not consider damage to their company's reputation as a contributing factor to the financial impact.
• Proving that businesses vastly underestimate the financial and overall impact that any downtime can have on their business, 81 percent of survey respondents do not calculate goods and materials lost into their cost of IT downtime, and 45 percent of businesses don't even consider lost sales revenue as a factor of their IT downtime cost.
• Even though many businesses aren't accurately calculating the cost of IT downtime, many more don't calculate this cost at all. 52 percent of survey respondents report that they do not calculate the hourly cost of downtime on their business. Fortunately, there has been a small increase in awareness, as 59 percent of survey respondents did not make these calculations in April 2011.

Businesses and organizations have several options for reducing application downtime duration, the frequency of downtime events and the impact of application downtime. A new assessment tool from Stratus and Aberdeen Group can identify these options. After taking a 5 minute survey, this tool examines the best practices associated with protecting virtualized applications and enables businesses to benchmark their performance against peers in protecting critical applications. By identifying key areas for improvement, businesses will be better able to achieve the uptime assurance they require.

More information

• For survey graphics, please visit: http://www.stratus.com/en/About/~/media/Stratus/Files/About/PressReleases/2011/20111122
• Find out what infrastructure you need to keep your cloud up and running: http://bit.ly/nFI8nB
• Video with Laura DiDio, principal analyst at ITIC: http://youtu.be/OlaUbxmRzKk

About Stratus Technologies
Stratus delivers the world's only proactive "uptime assurance" guarantee for the platforms that run the most vital functions of business, healthcare, manufacturing and government. Combining its resilient software and hardware technologies with thirty years of unparalleled remote monitoring and management expertise for availability, Stratus helps save lives and protect the business and reputations of companies, institutions, and governments the world over. To learn more about worry-free computing, visit www.stratus.com.

© 2011 Stratus Technologies Bermuda Ltd. All rights reserved.

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