Corporate Consequences Of Data Centre Downtime

downtime

Corporate Consequences Of Data Centre Downtime

Companies that utilise cloud-based networks to offer their products, services or applications are vulnerable to their IT infrastructure and data centre capabilities. Unfortunately, no infrastructure is perfect and at some stage will fail, or more specifically experience ‘downtime’.

It’s therefore crucial for companies to understand the importance of recovery mechanisms and data backup strategies to ensure they don’t pay the corporate consequences of Data Centre Downtime.

When your data centre experiences downtime, it can have far more harmful effects than simple inconvenience including damage to your revenue and reputation. According to Gartner research, the average cost of downtime for a company is $5,600 per minute which equates to over $300,000 per hour. Understanding the nature and variety of dangers that an outage can cause your business is crucial to ensuring that you provide the highest level of recovery mechanisms and data backup strategies to mitigate and alleviate occurrence.

Loss of Brand Image

For big businesses, a few minutes of outages will affect thousands. In October 2020, the National Australian Bank (NAB) experienced outages on their banks’ online services angering thousands. Customers found that once their EFTPOS machine went down they lost their own clients who were unwilling to pay cash in the COVID-19 climate.

Many smaller businesses simply can’t afford to take risks with an unreliable provider and will seek alternative solutions. If outages become frequent it can damage long-term brand image with users sharing their negative experiences with others. With social media platforms – the most present being Twitter – allowing customers to express their experience to a wide audience and creating ‘trends’. This can often leave the brand wondering how to rebuild its reputation and win back trust.

Loss of User Base

By creating major inconvenience for a customer or a loss of revenue for your user’s business you will undoubtedly lose your user base. For example, after a series of server outages and a low service level agreement (SLA) of 99.99% (equating to 52.26 minutes of system yearly downtime), small companies utilising Amazon Web Services are seeking more reliable solutions for their cloud infrastructure.

Our reliance on constant internet connectivity has made us and our customers less tolerant to the extent that any downtime is deemed unacceptable. Your server’s downtime can be a domino effect for a loss of reputation and reduced revenue for your business.

Loss of Employee Productivity

We have considered how server downtime will affect your user’s productivity and user base which both have a direct effect on monetary revenue. However, we have not considered the negative impact server downtime has on employee productivity.

Large companies are reliant on online communications and services for employees to do their jobs. This is not only to service clients via customer-facing support systems but to also allow employees to collaborate and communicate across email and virtual chat services. With many businesses relying solely on cloud applications, employees may be stuck with little to do and still be paid for it.

Loss of Opportunities

Data Centre Downtime means that your business will lose any business online as customers are unable to find and purchase your products or services. If your business model is reliant on a user’s internet service, it makes it impossible for you to gain revenue, ultimately losing any potential clients.

Research has shown that 47 per cent of online customers expect a website to load within 2 seconds whilst 40 per cent will go to another site after 3 seconds (with more following in the ensuing seconds). Think about what this means for your business if your server isn’t even able to load. Not only are your customers turning away, but you’re creating a negative experience that can evoke negative word-of-mouth resulting in brand and revenue damage.

 

Date centre downtime negatively impacts your business. However, it’s the level of impact alongside your ability to respond that determines the scale of effect on your revenue and reputation. Implementing recovery mechanisms and data backup strategies will help not only return to business as usual but also mitigate negative user experience and manage your customer relationships better.

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