The Real Cost Of Network Downtime

Network Down2Is this scenario familiar?

It’s a very busy time of the year. Clients are calling for services and they’re referring new prospects to you. Business is growing and it’s hard to keep up. For most small businesses, this is not a bad problem to have. Things are humming along — suddenly, your network goes down. Your employees can’t access critical client files on the server. You quickly check and the server is off. You can’t restart it; you hear nothing, not even a buzz.

You have a “computer guy” that you usually call when something goes wrong, but today you can’t reach him. He’s not returning your frantic calls. It’s early in the afternoon and clients are waiting to be served; new prospects are coming in wanting to discuss business and see that your computer system is down and employees waiting around with nothing to do.

Do you know the true cost to your business when your IT network goes down?

Many small business owners would look at what they were charged by their “computer guy” for the repairs and leave it at that. But, calculating the true cost of a network outage is more involved than just the repair bill.

A real example:

We know of an accounting firm that had about 20 people total, including 2 partners, 3 administrative support and 15 accountants. During tax season, this firm would hire up to 15 contract accountants to deal with the surge in business. So their staff typically ballooned to about 35 people during tax season.

Their server, which housed the main functions and programs was over 7 years old and needed manual restarts frequently. For about 2 years, the partners were told repeatedly that this server was too old to repair and needed to be replaced. The partners opted not to heed the advice. What do you think happened? You got it!

One day during the height of tax season, the server went down and could not be restarted. A new server had to be purchased, provisioned, prepped, installed, and brought back online. This firm also refused to install a Backup/Disaster Recovery system, so recovery took longer since they only had data backup. They were down for 5 days. What do you think this downtime really cost them? Let’s calculate.

 

Cost of Downtime

As you can see, the real cost of network downtime for this firm was over $167,000 not just the $4,500 they paid to replace the equipment.

What were the critical mistakes this firm made that cost them so dearly? Here they are:

  1. They didn’t heed the advice their vendor was giving them and did not replace the server.
  2. Instead of contracting with a Managed IT Services firm to monitor and maintain their systems, they used a “computer guy” they called when things broke down. This is called break-fix and as you can see above, it is very expensive in the long run. A Managed Services IT firm like XSolutions would have monitored and maintained the IT systems and replaced the server years before without causing a long term outage. As a matter of fact, a planned replacement would have taken place during off hours, with no business downtime at all.
  3. This firm was trying to save money and decided not to install a Backup/Disaster Recovery system (BDR) and opted only to use data backup. A full BDR system, such as that employed by XSolutions, would have an onsite device that can function as a server with the click of a button, effectively replacing the old server instantaneously. The client would have likely experienced downtime of about only 5 minutes. Then a new server would have been purchased, provisioned and replaced during off hours. Additionally, the BDR system would have a failover to the Cloud, so even if the office itself was damaged during a disaster, the company could set up a temporary location with full access to server functions. They were penny-wise and dollar foolish; a BDR system would have saved them over $150K in losses during this incident alone.

As a business owner, you need to look at the total affect downtime would have on your firm, not just the immediate dollars it costs to fix the problem, in this case the cost of new equipment and the labor to install it.

Another issue that many business owners do not fully understand is that data backup is not a Disaster Recovery Plan. It is a component of BDR, but data backup alone does not guarantee a quick recovery. Replacement servers have a different architecture than older systems. You cannot simply copy the data from an old server onto a new one. An effective BDR system will have what’s called “bare metal restore” capabilities, taking periodic snapshot images of the running server that can be loaded onto new hardware and run. Data backups cannot do this.

What to do to protect your business:

  • Use a Managed IT Services firm like XSolutions to monitor and maintain your network. Break-fix, although it appears cheaper because you only call when something goes wrong, is more expensive in the long run. Managed IT Services reduces the cost of ownership for a company’s computer systems over time.
  • Replace servers every 4 to 5 years. Servers run 24/7/365 and perform thousands of services per hour. Hardware wears out and older systems can’t take advantage of newer, more efficient, and powerful software. They are true workhorses but need to be replaced when they get old and less reliable.
  • Install a business-grade Backup/Disaster Recovery system that has an onsite device for quick restores and server functionality, failover to the Cloud, and bare metal restore capabilities.
  • Employ a data backup system, such as Carbonite, as a “backup to the backup” for extra insurance.

As a business owner, it may seem prudent to skimp on the company’s IT resources and capabilities to save money; but as you can see from our  example above, it is not. Your IT systems are an asset to your business that, when used correctly can increase revenue, profits, and productivity.  They should not be viewed as a necessary expense to your business because as you are painfully aware, when your network goes down your business comes to a screeching halt. Don’t make that mistake.

 

Not sure how your network measures up? Want to know what you need to do to make sure your business is protected properly? Then call (845) 362-9675 or email us and ask about our FREE Technology Assessment program for qualified New York and New Jersey businesses.

 

XSolutions is a Managed Services Provider (MSP) and provides 24/7/365 remote monitoring, scheduled workstation and server maintenance, Help Desk Services, Cloud & Hosted Services, Backup/Disaster Recovery, and Software Development. Call us at (845) 362-9675 and see how we can help your company.