{"id":48860,"date":"2021-08-16T11:33:08","date_gmt":"2021-08-16T18:33:08","guid":{"rendered":"\/us\/en\/blog\/?p=48860"},"modified":"2023-01-25T12:05:23","modified_gmt":"2023-01-25T20:05:23","slug":"how-much-does-an-unplanned-it-outage-cost","status":"publish","type":"post","link":"\/us\/en\/blog\/how-much-does-an-unplanned-it-outage-cost\/","title":{"rendered":"How much does an unplanned IT outage cost?"},"content":{"rendered":"<p><b>Highlights:<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><a href=\"http:\/\/courseware.cutm.ac.in\/wp-content\/uploads\/2020\/06\/Assessing-the-Financial-Impact-of-Downtime-UK.pdf\"><b>59% of Fortune 500<\/b><\/a><span style=\"font-weight: 400;\"> companies experience at least 1.6 hours of downtime per week, which can cost up to $46 million per year.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Planned and unplanned IT outages are significant costs to enterprises, with unplanned downtime costing up to <\/span><a href=\"https:\/\/www.ibm.com\/downloads\/cas\/L57KW7ND\"><b>35% more<\/b><\/a><span style=\"font-weight: 400;\"> than planned downtime.<\/span><\/li>\n<li aria-level=\"1\">99.999% availability is the gold standard for business-critical cloud services.<\/li>\n<\/ul>\n<hr \/>\n<p><span style=\"font-weight: 400;\">\t\t\t<\/p>\n<div class=\"rc-bottom-cta rc-bottom-cta__landscape\" style=\"background-image: url(\/us\/en\/blog\/wp-content\/themes\/ringcentral\/assets\/images\/temp\/rc-bottom-cta-bg.png);\">\n<div class=\"bottom-cta-img\">\n\t\t\t\t\t<img decoding=\"async\" width=\"930\" height=\"700\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2021\/04\/Untitled-design-4.png\" class=\"responsive-image\" alt=\"Learn all of ...\" \/>\t\t\t\t<\/div>\n<div class=\"bottom-cta-copy\">\n<div class=\"rc-bottom-cta__text\" style=\"\">\n<h3\n\t\t\t\t\t\t\t\tclass=\"rc-bottom-cta__title headline-copy\"\n\t\t\t\t\t\t\t\tstyle=\"\"\n\t\t\t\t\t\t>Learn all of the ins and outs of Microsoft Teams direct routing, including reliability, security, and different options.<\/h3>\n<\/p><\/div>\n<div class=\"rc-bottom-cta__btn-wrapper\" style=\"\">\n\t\t\t\t\t\t<a\n\t\t\t\t\t\t\t\tclass=\"btn btn-primary btn-lg rc-bottom-cta__link\"\n\t\t\t\t\t\t\t\ttitle=\"Join the webinar\"\n\t\t\t\t\t\t\t\thref=\"https:\/\/redmondmag.com\/webcasts\/2021\/04\/ringcentral-june-1.aspx?partnerref=rc601-1\"\n\t\t\t\t\t\t\t\tdata-dl-name=\"Join the webinar\"\n\t\t\t\t\t\t\t\tdata-dl-element=\"button\"\n\t\t\t\t\t\t\t\tdata-dl-additional-info=\"bottom cta banner\"\n\t\t\t\t\t\t\t\tdata-no-auto-dl=\"true\"\n\t\t\t\t\t\t\t\tstyle=\"\"\n\t\t\t\t\t\t\t\tonmouseover=\"\"\n\t\t\t\t\t\t\t\tonmouseout=\"this.style.backgroundColor='';this.style.borderColor='';this.style.color='';\"\n\t\t\t\t\t\t>Join the webinar<\/a>\n\t\t\t\t\t<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>\t<\/span><\/p>\n<hr \/>\n<p><span style=\"font-weight: 400;\">Most of your work days go by smoothly. You turn on your computer, shoot off your morning emails, join your meetings, and type away at presentations or reports. And when there are no hiccups in your workflows, your IT people are happy. After all, when it comes to your network, no news is good news.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">But at some point, you\u2019ll inevitably face outages with your technologies. Maybe it\u2019s a power outage, your internet, or even your entire PBX system. These unplanned outages can last minutes to hours and cause havoc among your IT teams.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Unplanned outages aren\u2019t just IT issues, however. When you look at the big picture, unplanned outages affect your entire company\u2019s productivity\u2014especially if they happen during normal work hours.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">According to one <\/span><a href=\"https:\/\/www.ibm.com\/downloads\/cas\/L57KW7ND\"><span style=\"font-weight: 400;\">IBM Global Services study<\/span><\/a><span style=\"font-weight: 400;\"> on large enterprises, the average revenue cost of an unplanned application outage was estimated at over <\/span><b>$400,000 per hour<\/b><span style=\"font-weight: 400;\">. And 35% of those organizations experience it on a monthly basis. That\u2019s a lot of productivity lost.<\/span><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-48865\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2021\/08\/Unplanned-outage-1.png\" alt=\"\" width=\"1580\" height=\"830\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Let\u2019s look at this from another angle. According to Dunn &amp; Bradstreet, <\/span><a href=\"http:\/\/courseware.cutm.ac.in\/wp-content\/uploads\/2020\/06\/Assessing-the-Financial-Impact-of-Downtime-UK.pdf\"><b>59% of Fortune 500 companies<\/b><\/a><span style=\"font-weight: 400;\"> experience a minimum of 1.6 hours of downtime per week.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">To put this in perspective, assume that an average Fortune 500 company has 10,000 employees who are paid an average of $56 per hour, including benefits. Just the labor component of downtime costs would be <\/span><b>$896,000 weekly<\/b><span style=\"font-weight: 400;\"> to the company, which translates into more than <\/span><b>$46 million per year<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Sure, this assumes that any downtime completely halts all operations. But even if the downtime only sidelined certain teams or specific tools, productivity (and revenue) are still lost.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><b>What are the costs of downtime?<\/b><\/h2>\n<p><span style=\"font-weight: 400;\">Estimating the cost of unplanned downtime can be tricky. <\/span><a href=\"https:\/\/www.the20.com\/blog\/the-cost-of-it-downtime\/#:~:text=According%20to%20Gartner%2C%20the%20average,hour%20at%20the%20higher%20end.\"><span style=\"font-weight: 400;\">Gartner<\/span><\/a><span style=\"font-weight: 400;\"> estimates that, on average, IT downtime can cost organizations up to <\/span><b>$5,600 per minute<\/b><span style=\"font-weight: 400;\">. Financial services, telecommunications, manufacturing, and energy industries are hit much harder too, with the highest rate of revenue loss during IT downtime.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\"><\/p>\n<div class=\"quote-text-break-point-large\">\n<p class=\"quote-text\">Downtime can cost small businesses <strong>$423 per minute<\/strong>, whereas large organizations can lose over <strong>$9,000 per minute<\/strong>. <\/p>\n<\/p><\/div>\n<p>\t<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Of course, there\u2019s no true way to put a number behind it. Downtime can cost small businesses <\/span><b>$423 per minute<\/b><span style=\"font-weight: 400;\">, whereas large organizations can lose over <\/span><b>$9,000 per minute<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Why such a large variance? The simple answer is that every business is unique. From employee headcount to on-premises hardware and IT security, these all factor into how downtime affects their operations.<\/span><\/p>\n<h2 class=\"heading h2\"><strong>Other costs of downtime<\/strong><\/h2>\n<p><span style=\"font-weight: 400;\">But companies of all sizes lose more than money for every outage they experience. Here are several other areas that suffer too:<\/span><\/p>\n<h3><b>1. Reputation and customer loyalty<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The sales-per-hour numbers do not include the value of customer loyalty. To more accurately assess total lost sales, the impact percentage must be increased to reflect the lifetime value of customers who permanently move to a competitor. <\/span><\/p>\n<p><span style=\"font-weight: 400;\">If a large percentage of customers typically become very loyal after a satisfactory buying experience, the impact factor may significantly exceed 100%, possibly by a high multiple.<\/span><\/p>\n<h3><b>2. Human resources<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Downtime cost results in lost employee productivity, which can be measured in terms of the salaries, wages, and benefits of idled people. After a downtime event, remedial actions are often required to repair the damage.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For example, employees might work overtime\u2014at overtime rates\u2014or temporary staff may be contracted to recover lost data and enter accumulated paper transactions.<\/span><\/p>\n<div class=\"rc-subscribe\" id=\"new-rc-subscribe\"  style=\"background-image:url('\/us\/en\/blog\/wp-content\/themes\/ringcentral\/assets\/images\/temp\/subscribe.png')\">\n\t\t<button class=\"close js-popup-close\"><svg class=\"icon_close_mobile\" width=\"20\" height=\"20\"><use xlink:href=\"#icon_close_mobile\"><\/use><\/svg><\/button><\/p>\n<div class=\"rc-subscribe__wrapper\">\n<div class=\"rc-subscribe__wrapper_text\">\n<h3 class=\"rc-subscribe__title h2\">Stay informed with RingCentral<\/h3>\n<div class=\"rc-subscribe__subtitle\">Subscribe to our emails for the latest blogs, events, and exclusive content on AI-powered communication solutions. Stay ahead with insights and tips from the leader in trusted AI communications.<\/p>\n<p>\t\t\t\t\t<a href=\"https:\/\/www.ringcentral.com\/legal\/privacy-notice.html\" target=\"_blank\" data-dl-name=\"Privacy Notic\" data-dl-element=\"link\" data-dl-additional-info=\"social\" rel=\"noreferrer noopener\">Privacy Notice<\/a>\n\t\t\t\t<\/div>\n<\/p><\/div>\n<div class=\"rc-subscribe__wrapper_form\">\n<form class=\"\" data-event-init=\"true\" novalidate data-js-form>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<input\n\t\t\t\t\t\t\t\tname=\"email\"\n\t\t\t\t\t\t\t\tplaceholder=\"Email address *\"\n\t\t\t\t\t\t\t\ttitle=\"Must be valid email. example@yourdomain.com\"\n\t\t\t\t\t\t\t\tminlength=\"4\"\n\t\t\t\t\t\t\t\tmaxlength=\"255\"\n\t\t\t\t\t\t\t\ttype=\"email\"\n\t\t\t\t\t\t\t\trequired\n\t\t\t\t\t\t\t\tpattern=\"[a-z0-9._%+\\-]+@[a-z0-9.\\-]+\\.[a-z]{2,}$\"\n\t\t\t\t\t\t\t\tclass=\"field__control\"\n\t\t\t\t\t\t\t\tautocomplete=\"on\"\n\t\t\t\t\t\t\t\taria-required=\"true\"\n\t\t\t\t\t\t\t\tdata-dl-events-hover=\"true\"\n\t\t\t\t\t\t\t\tdata-dl-element=\"email\"\n\t\t\t\t\t\t\t\tdata-dl-additional-info=\"LET'S WORK TOGETHER\"\n\t\t\t\t\t\t\t\taria-label=\"Email address *\"\n\t\t\t\t\t\t\t\taria-errormessage=\"email-subscribe-errors\"\n\t\t\t\t\t\t><br \/>\n\t\t\t\t\t\t<span class=\"field__errors\" id=\"email-subscribe-errors\" data-js-form-field-errors><\/span>\n\t\t\t\t\t<\/div>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<select\n\t\t\t\t\t\t\t\tname=\"Country__c\"\n\t\t\t\t\t\t\t\trequired\n\t\t\t\t\t\t\t\tclass=\"field__control\"\n\t\t\t\t\t\t\t\taria-required=\"true\"\n\t\t\t\t\t\t\t\taria-expanded=\"false\"\n\t\t\t\t\t\t\t\taria-label=\"Country *\"\n\t\t\t\t\t\t\t\taria-errormessage=\"country-subscribe-errors\"\n\t\t\t\t\t\t><option value=\"\" disabled=\"disabled\" selected=\"selected\">Country<\/option><option value=\"Canada\">Canada<\/option><option value=\"United_States\">United States<\/option><\/select><\/p>\n<p>\t\t\t\t\t\t<span class=\"field__errors\" id=\"country-subscribe-errors\" data-js-form-field-errors><\/span>\n\t\t\t\t\t<\/div>\n<div class=\"rc-subscribe__row\">\n\t\t\t\t\t\t<button type=\"submit\" data-event-init=\"true\">Subscribe<\/button>\n\t\t\t\t\t<\/div>\n<\/p><\/form>\n<\/p><\/div>\n<\/p><\/div>\n<div class=\"confirm-form\" role=\"status\" aria-live=\"polite\" style=\"display: none;\" aria-hidden=\"true\">\n<div class=\"confirm-form__text\">Thank you for your interest in RingCentral<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<h3><b>3. Legal<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Highly regulated industries like banking and finance, food, government, healthcare, and utilities must also factor in the potential losses related to litigation as well as civil penalties stemming from organizations\u2019 failure to meet service level agreements (SLAs) or compliance regulations.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Moreover, for a select 3% of organizations, whose businesses are based on high-level data transactions like banks and stock exchanges, online retail sales, or even utility firms, <\/span><a href=\"https:\/\/itic-corp.com\/blog\/2017\/05\/hourly-downtime-tops-300k-for-81-of-firms-33-of-enterprises-say-downtime-costs-1m\/\"><span style=\"font-weight: 400;\">losses may be calculated in millions of dollars per minute<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h3><b>IT leaders must invest in solutions to reduce the impact<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The overarching message is clear: downtime of even a few minutes is expensive and unwelcome.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Businesses must proactively work with their infrastructure and cloud vendors to ensure that their systems, applications, and networks come with the <\/span><b>highest level of reliability<\/b><span style=\"font-weight: 400;\">. This is imperative as the industry moves to interconnected ecosystems.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In the IBM study cited below, 63% of IT leaders said that they expect their organization\u2019s revenues to increase if they can achieve <\/span><b>zero downtime<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><img decoding=\"async\" class=\"alignnone size-full wp-image-48866\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2021\/08\/Unplanned-outage-2.png\" alt=\"\" width=\"1580\" height=\"830\" \/><\/p>\n<p><span style=\"font-weight: 400;\">Since the pandemic began, IT executives have faced major disruptions, and many are still uncertain about what IT will be like on the other side of the worldwide health crisis. That means using the lessons learned from this real-life stress test and the need for resiliency and flexibility to ride through them.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><b>How can RingCentral help?<\/b><\/h2>\n<p><a href=\"https:\/\/www.ringcentral.com\/us\/en\/blog\/in-a-work-from-home-world-service-level-agreements-for-cloud-communications-take-center-stage\/\"><b>Five nines of reliability (99.999%)<\/b><\/a><span style=\"font-weight: 400;\"> is the highest benchmark of availability for business-critical systems, networks, and software required by banking and other transaction-intensive industries. It\u2019s also the uptime SLA we provide to <\/span><b>every one of our customers<\/b><span style=\"font-weight: 400;\">.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">How do we do this? Our data centers provide seven layers of failover redundancy that minimize service interruption in case of geographic outages or natural disasters. Our systems are also located in the same facilities as all major telecommunications carriers to maintain the fastest response times and interconnect services possible.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">\t\t\t<\/p>\n<div class=\"rc-bottom-cta rc-bottom-cta__portrait\" style=\"background-image: url(\/us\/en\/blog\/wp-content\/themes\/ringcentral\/assets\/images\/temp\/rc-bottom-cta-bg.png);flex-direction: row-reverse;\">\n<div class=\"bottom-cta-img\">\n\t\t\t\t\t<img decoding=\"async\" width=\"683\" height=\"790\" src=\"\/us\/en\/blog\/wp-content\/uploads\/2020\/10\/RC-security-WP-1.png\" class=\"responsive-image\" alt=\"Your data is ...\" \/>\t\t\t\t<\/div>\n<div class=\"bottom-cta-copy\">\n<div class=\"rc-bottom-cta__text\" style=\"\">\n<h3\n\t\t\t\t\t\t\t\tclass=\"rc-bottom-cta__title headline-copy\"\n\t\t\t\t\t\t\t\tstyle=\"\"\n\t\t\t\t\t\t>Your data is important to us. Here&#8217;s how we protect it.<\/h3>\n<\/p><\/div>\n<div class=\"rc-bottom-cta__btn-wrapper\" style=\"\">\n\t\t\t\t\t\t<a\n\t\t\t\t\t\t\t\tclass=\"btn btn-primary btn-lg rc-bottom-cta__link\"\n\t\t\t\t\t\t\t\ttitle=\"Read the whitepaper\"\n\t\t\t\t\t\t\t\thref=\"https:\/\/netstorage.ringcentral.com\/documents\/cloud_communications_security.pdf\"\n\t\t\t\t\t\t\t\tdata-dl-name=\"Read the whitepaper\"\n\t\t\t\t\t\t\t\tdata-dl-element=\"button\"\n\t\t\t\t\t\t\t\tdata-dl-additional-info=\"bottom cta banner\"\n\t\t\t\t\t\t\t\tdata-no-auto-dl=\"true\"\n\t\t\t\t\t\t\t\tstyle=\"\"\n\t\t\t\t\t\t\t\tonmouseover=\"\"\n\t\t\t\t\t\t\t\tonmouseout=\"this.style.backgroundColor='';this.style.borderColor='';this.style.color='';\"\n\t\t\t\t\t\t>Read the whitepaper<\/a>\n\t\t\t\t\t<\/div>\n<\/p><\/div>\n<\/p><\/div>\n<p>\t<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In fact, RingCentral has delivered <\/span><b>10 consecutive quarters of 99.999% uptime SLA<\/b><span style=\"font-weight: 400;\"> for our flagship product, <\/span><a href=\"https:\/\/www.ringcentral.com\/office\/how-it-works.html\"><b>RingCentral MVP<\/b><\/a><span style=\"font-weight: 400;\">\u2122. Our data centers share hosted facilities space with some of the world\u2019s largest internet companies and financial institutions. In addition, they\u2019re in close physical proximity to the world\u2019s top 20 internet exchange points and are co-located with all the major US telecommunications carriers to maintain the fastest response times and interconnect services possible.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Want to know more about our reliability? Check out our <\/span><a href=\"https:\/\/www.ringcentral.com\/trust-center.html\"><b>Trust Center<\/b><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Highlights: 59% of Fortune 500 companies experience at least 1.6 hours of downtime per week, which can cost up to $46 million per year. Planned and unplanned IT outages are significant costs to enterprises, with unplanned downtime costing up to 35% more than planned downtime. 99.999% availability is the gold standard for business-critical cloud services. &#8230;<\/p>\n","protected":false},"author":29,"featured_media":48861,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[17901],"tags":[1812,4356],"class_list":["post-48860","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business-leadership","tag-cost","tag-reliability"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.3 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>How much does an unplanned IT outage cost? | RingCentral Blog<\/title>\n<meta name=\"description\" content=\"Highlights: 59% of Fortune 500 companies experience at least 1.6 hours of downtime per week, which can cost up to $46 million per year. 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