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August 2014 In recent
newsletters, we have explained how storage system availability affects
business operations and described some of the key causes and costs of system
downtime. This month, we conclude with a look beyond IT, at the real cost
downtime imposes on businesses. The Real Cost of Downtime to Businesses As cited in previous newsletters, Aberdeen estimates that the average
cost of downtime for surveyed small, mid-size and large businesses at
$163,000 per hour. This includes the costs of lost revenues, lost productivity,
IT labor required to restore system operations, and more. Example: Estimating
Downtime Costs at a Global Company Using
a simplistic approach, the cost per
hour of downtime might be calculated by adding lost revenue cost per hour to the lost productivity cost per hour caused by the downtime event. Let’s
take a look at a sample global company that operates 24x7, has annual revenue
of $60 Million and 600 employees, with average annual salary $30,000 per
employee working 50 hours per week. Assuming that a planned and unplanned
outage affects 10% and 80% of the workforce respectively, resulting in the
following costs. While these calculations have been simplified, they are
representative of actual costs.
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