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Counting the real cost of downtime

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A massive 96% of organisations have digital transformation initiatives on their roadmap and more than half of those initiatives are in process now.
There is obviously a huge appetite across enterprises to utilize innovation for competitive advantage, and this places a huge burden on businesses to deliver access to services, data and apps, at any time and from anywhere 24.7.365.
However, according to the latest industry data released today from Veeam Software, there is a major disconnect between user expectations and what IT can deliver, and it is hindering innovation. In fact, 82% of enterprises admit to suffering an “availability gap” (the gap between users demand for uninterrupted access to services and what businesses and IT can deliver), which is impacting the bottom line to the tune of $21.8 million per year, and almost two thirds of respondents admit that this is holding back innovation.
Now in its sixth year, the 2017 Veeam Availability Report surveyed more than 1 000 senior IT leaders from 24 countries and shows that 69% of global enterprises feel that Availability (continuous access to services) is a requirement for Digital Transformation; however, the majority of senior IT leaders (66%) feel these initiatives are being held back by unplanned downtime of services caused by cyber-attacks, infrastructure failures, network outages, and natural disasters (with server outages lasting an average of 85 minutes per incident).
While many organisations are still “planning” or “just beginning” their transformational journeys, more than two thirds agree that these initiatives are critical or very important to their C-suite and lines of business.
The 2017 Veeam Availability Report reveals the true impact of downtime on businesses. While downtime costs vary, the data shows that the average annual cost of downtime for each organization in this study[ii] amounts to $21,8-million, up from $16-million from last year’s report.
Downtime and data loss are also causing enterprises to face public scrutiny, in ways that cannot be measured by a balance sheet. This year’s study shows that almost half of enterprises see a loss of customer confidence, and 40% experienced damage to brand integrity, which affect both brand reputation and customer retention. Looking at internal implications, a third of respondents see diminished employee confidence and 28% have experienced a diversion of project resources to ‘clean up’ the mess.
Unsurprisingly, cloud and its various consumption models are changing the way businesses approach data protection. The report shows that more and more companies are considering cloud as a viable springboard to their digital agenda, with software as a service investment expected to increase by over 50% in the next 12 months.
In fact, almost half of business leaders (43%) believe cloud providers can deliver better service levels for mission-critical data than their internal IT processes. Investments in Backup-as-a-Service (BaaS) and Disaster Recovery as a Service (DRaaS) are expected to rise similarly as organizations combine them with cloud.
In addition, 77% of enterprises are seeing what Veeam has identified as a ‘Protection Gap’ (an organization’s tolerance for lost data being exceeded by IT’s inability to protect that data frequently enough), with their expectations for uptime consistently being unmet due to insufficient protection mechanisms and policies.
Although companies state that they can only tolerate 72 minutes per year of data loss within ‘high priority’ applications, Veeam’s findings show that respondents actually experience 127 minutes of data loss, a discrepancy of nearly one hour. This poses a major risk for all companies and impacts business success in many ways.
“Today, immediacy is King and consumers have zero tolerance for downtime, be it of a business application or in their personal lives,” says Peter McKay, president and COO of Veeam Software. “Companies are laser-focused on delivering the best user experience and whether they realize it or not, at the heart of this is Availability. Anything less than 24.7.365 access to data and applications is unacceptable.
“However, our report states such ubiquitous access is merely a pipedream for many organizations, suggesting new questions need to be asked of transformation plans and a different conversation started about existing infrastructure. Enterprises are facing a major crisis from competitors that are able to offer this uptime and combine that with user experience.”