In today’s modern economy, businesses rely on their IT networks more than ever before. But with that reliance comes big risks.
Recent data from a variety of sources highlight the growing costs of network downtime. In 2019, for example, Facebook estimated that the 14-hour outage it suffered on March 13th cost the firm more than $90 million. Furthermore, in 2016, Delta Airlines reported that a five-hour disruption of its IT system led to a loss of business, totaling a staggering $150 million, proving that it is not just companies in the tech sector that suffer when there are outages.
The lesson from the above examples is clear: if downtime is something that can affect the big players, it can harm the little guys too. In reality, though, the problems for small companies are probably worse. While the likes of Facebook and Delta Airlines can call upon their enormous internal computing resources to quickly fix unexpected issues as they arise, smaller firms usually can’t.
A recent IBM study reveals just how damaging outages are for business. It found that IT outages cost the average US firm more than $8.19 million in lost revenue, brand damage, and lost productivity.
Granted, the data above include mainly multinationals, but even the losses for small companies from downtime can be substantial. A report from Atlassian, for example, found that companies employing fewer than fifty people still lost between $137 and $427 per minute when their IT infrastructure went offline.
The Rise of Managed Service Providers
It should come as no surprise, therefore, that companies are increasingly looking for ways to eliminate the risk of downtime and keep their businesses operational 24-hours per day. For many, it is clear that the old break/fix strategy of waiting for problems to arise until they get fixed is unfit for the modern era. Firms are now far too dependent on their IT systems to risk waiting for an outage to occur before doing anything about it.
For this reason, we’re seeing the rise in businesses hiring Managed Service Providers or MSPs. Here, businesses outsource their network management to third-party providers who render services through the cloud. Companies pay a monthly fee, and in return, they get all of their IT needs taken care of for them.
These MSPs offer compelling benefits for small businesses whose networks keep going down. Rather than waiting for problems to arise, these agencies continually scan company systems, looking for issues that might put them at risk.
Leading IT services companies, for instance, use a variety of active monitoring techniques that detect and eliminate potential sources of downtime. One of the most interesting examples is software that can track the warning signs of hard drive degradation. MSPs can see that a drive is going to fail long before it becomes evident to in-house IT professionals and swap it out for a new one before it puts company data at risk.
These services also monitor network activity 24-hours a day—something that was nearly impossible for all but the biggest companies in the past. Typically, they use a combination of both software and human-based monitoring to seek out dangerous data breaches and plug before they lead to outages.
Because MSPs employ seasoned IT professionals, they also offer companies another benefit: the ability to actively identify security defects and patch them before they become fully-fledged issues. MSPs are using their experience in cybersecurity to provide advice and strategy recommendations to their customers, bolstering their systems.
The Full Cost of Downtime
The uptake of MSPs is likely to increase as more businesses come to understand the full cost of downtime. Currently, company executives fixate on lost revenue, but there are many more expenses involved.
Ponemon, for example, suggests that the most substantial cost to a business from downtime is customer churn and damage to reputation. Lost revenue was secondary in importance. The agency also identified what it called “lost internal productivity.” Downtime, it found, didn’t just affect the IT team responsible for resolving the incident, but practically everyone else in the company, even if they didn’t rely on IT systems directly. When employees cannot access internet resources, they cannot share their findings with others, breaking entire teams in the process.
As the adverse effects of downtime become more pronounced, firms will soon give up on managing their own networks. Instead, they’ll move towards MSPs as the safer and more affordable option.