# The severe impact of downtime on companies’ bottom lines Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2022-08-24 Category: BUSINESS Category URL: https://financedigest.com/category/business Meta Title: The Importance of Uptime for Financial Stakeholders in the Meta Description: Discover why high availability is crucial in preventing revenue losses, reputational damage, and customer distrust in the digital world. Learn more now. URL: https://financedigest.com/the-severe-impact-of-downtime-on-companies-bottom-lineshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/storyblocks-business-woman-at-work-as-advisor-in-office-financial-consultant-with-client-health-insurance-worker-meeting-asian-manager-explaining-contract-in-waiting-roomh5bn2lgu7n-1736815386024-compressed.jpg) _By_ **_Jon Lucas,_** _Co-founder and Director at_ [_Hyve Managed Hosting_](https://www.hyve.com/) The advanced connectivity of today’s world has provided a platform for a sharp increase in the number of goods and services that are now available online. This has made the online world a goldmine not only for legacy companies that have been able to adapt adequately to online environments, but also to digital companies that have been born in the internet era. However, despite the opportunity, there are challenges and threats that come with the digital era. Customers now [expect high availability from any business](https://www.financedigest.com/german-businesses-expect-only-mild-recession-as-disruptions-ease.html "German businesses expect only mild recession as disruptions ease") they spend money with, and if they experience downtime, even for a matter of seconds, they’re not likely to stick around. An unexpected cloud outage can [bring all business](https://www.financedigest.com/how-to-bring-business-and-charities-together-through-events.html "How To Bring Business And Charities Together Through Events") operations (including those directly linked to revenue) to an immediate and unceremonious halt. To prevent this eventuality, finance teams should [work closely with IT departments to ensure their company’s](https://www.financedigest.com/spain-offers-to-pay-companies-testing-a-4-day-work-week.html "Spain offers to pay companies testing a 4-day work week") digital infrastructure is sufficiently resilient – or risk incurring serious revenue losses, reputational damage and customer distrust. Here’s three [things financial stakeholders need to consider](https://www.financedigest.com/4-things-to-consider-before-buying-your-dream-car.html "4 Things To Consider Before Buying Your Dream Car") when it comes to the importance of uptime: - **Customers won’t hang around for long** A few weeks ago, a major Cloudflare outage caused an hour-long outage – leaving businesses such as Shopify, Fitbit and Peloton unable to function properly as their websites [crashed due to a policy update being incompatible with a new routing system](https://www.financedigest.com/tesla-reports-two-new-fatal-crashes-involving-driver-assistance-systems.html "Tesla reports two new fatal crashes involving driver assistance systems"). There are many [reasons why sites](https://www.financedigest.com/5-reasons-why-e-commerce-sites-need-a-token-gateway.html "5 reasons why e-commerce sites need a token gateway") might suffer downtime, but whatever the explanation, research has found that 2 in 5 (40%) of UK consumers would wait under a minute if faced with an online outage before switching to a competitor’s site. Hyve Managed Hosting’s [2022 research](https://www.hyve.com/insights/downloads/consumer-tolerance-to-it-downtime/) goes further, discovering that 34% of UK consumers would wait less than 30 seconds on an unresponsive site. Although the Cloudflare [outage only lasted an hour](https://www.financedigest.com/facebook-blames-faulty-configuration-change-for-nearly-six-hour-outage.html "Facebook blames “faulty configuration change” for nearly six-hour outage"), this research highlights how even a short outage can make a big difference. - **The true cost of an outage** Customers opting for competitors’ [services will obviously have a direct impact on a company’s](https://www.financedigest.com/italys-eni-sets-up-sustainable-transport-services-company.html "Italy’s Eni sets up sustainable transport services company") bottom line. In [addition to lost customer revenue](https://www.financedigest.com/animal-feed-additives-market-regional-industry-segmentation-analysis-by-production-consumption-revenue-and-growth-rate-by-2031.html "Animal Feed Additives Market Regional Industry Segmentation, Analysis by Production, Consumption, Revenue and Growth Rate by 2031"), it’s also worth considering the wider cost implications of an outage. For example, could repeated outages discourage [investors from funding](https://www.financedigest.com/some-uk-property-funds-defer-investor-withdrawals.html "Some UK property funds defer investor withdrawals") a company? What about potential partners – would they be put off from working with a [company if their online presence was seen](https://www.financedigest.com/the-logo-of-french-cloud-computing-company-ovhcloud-is-seen-on-a-data-center-building-in-strasbourg-france-october-13-2021-reuters-christian-hartmann.html "The logo of French cloud computing company OVHcloud is seen on a data-center building in Strasbourg, France, October 13, 2021. REUTERS/Christian Hartmann") to be unreliable? When everything is taken into consideration, downtime is becoming more and more costly for businesses. According to the [Uptime Institute’s 2021 Global Data Center Survey](https://www.cloudcomputing-news.net/news/2022/jun/09/downtime-impact-worsening-as-industry-fails-to-curb-outages/), the cost of downtime is growing steadily. Over 60% of businesses have lost over $100,000 as a result of [cloud outages](https://www.financedigest.com/3-steps-to-combat-cloud-outages.html "3 Steps to Combat Cloud Outages"). Meanwhile, of that 60%, 15% had lost more than $1 million. As organisations continue to leverage the benefits of [digital transformation](https://www.financedigest.com/how-digital-is-transforming-finance-in-2023.html "How Digital Is Transforming Finance in 2023"), the cost of downtime is only likely to continue to climb. - **Effect on brand reputation** It’s easy to see how customers and [investors might be turned](https://www.financedigest.com/certainty-in-an-uncertain-world-post-brexit-investors-turn-to-commercial-property-and-fixed-returns.html "Certainty in an uncertain world – post-Brexit investors turn to commercial property and fixed returns") off by downtime, and how this would affect a business financially. But what about the financial consequences of a negative [public](https://www.financedigest.com/italy-slashes-2023-growth-forecast-but-sees-public-finances-improving.html "Italy slashes 2023 growth forecast but sees public finances improving") perception? Website outages inevitably feed into a brand’s reputation. For example, millennials are the least forgiving of website downtime; when [sites go down it immediately causes a negative brand](https://www.financedigest.com/tag-outreach-prompted-reduction-in-ad-spend-by-most-brands-advertising-on-european-pirate-sites.html "TAG OUTREACH PROMPTED REDUCTION IN AD SPEND BY MOST BRANDS ADVERTISING ON EUROPEAN PIRATE SITES") perception for 57% of this demographic. A negative reputation among customers and prospects is liable to stunt business growth, damaging loyalty and confidence in the brand and [ultimately affecting sales](https://www.financedigest.com/the-ultimate-excel-sales-tracking-templates-for-businesses.html "The Ultimate Excel Sales Tracking Templates For Businesses") and bottom-line growth. **The [bottom line:](https://www.financedigest.com/how-high-performers-can-increase-a-bottom-line.html "How high performers can increase a bottom line") how to avoid downtime** It is essential that these three implications of an outage are understood at the highest [level of a business](https://www.financedigest.com/gamification-in-business-unlocking-the-next-level-2.html "Gamification in Business: Unlocking the Next Level"), so that effective change can be implemented to ensure business continuity. Our advice is that business decision makers and other departments engage and communicate with IT [teams to ensure their digital](https://www.financedigest.com/the-digital-voice-appointed-by-raft-of-new-clients-as-its-team-expands-by-270.html "The Digital Voice™ appointed by raft of new clients as its team expands by 270%") infrastructure is up to the job. It should be a [priority to implement a system](https://www.financedigest.com/untapped-cost-savings-why-smart-building-management-systems-are-a-finance-department-priority.html "Untapped Cost Savings: Why Smart Building Management Systems are a Finance Department Priority") in which, even during periods of high traffic or peak activity, additional resources can be easily and dynamically added with ease, with no drop in performance. Resources can then be [scaled back](https://www.financedigest.com/mifid-ii-why-you-should-not-scale-back-your-implementation-efforts.html "MIFID II: WHY YOU SHOULD NOT SCALE BACK YOUR IMPLEMENTATION EFFORTS") again when normal operating levels resume in order to manage costs. It’s also important to remember that internal IT teams can [come under a lot of pressure](https://www.financedigest.com/world-u-s-share-markets-come-under-pressure-as-delta-economic-worries-mount.html "World, U.S. share markets come under pressure as Delta, economic worries mount") when infrastructure is required to scale – be it a sudden requirement or planned. Added to this, there’s no point in the marketing department [planning the perfect promotion and then the website suffering an outage when it goes live because no one thought to let IT know](https://www.financedigest.com/5-annuity-tips-to-know-for-2023-retirement-planning.html "5 Annuity Tips to Know for 2023 Retirement Planning") there was likely to be some extra traffic. Companies can solve this issue by working with [managed service providers](https://www.financedigest.com/newly-launched-quintessential-to-provide-prestige-living-management-platform-for-prs.html "Newly launched Quintessential to provide ‘prestige living’ management platform for PRS") who can support internal teams by taking care of this process and ensuring it happens seamlessly. Ultimately, an awareness of downtime and how to avoid it among the c-level ensures that the knowledge can be filtered throughout the company, [connecting teams and giving the business](https://www.financedigest.com/importance-of-transparency-and-connections-in-business.html "Importance of Transparency and Connections in Business") the best shot at avoiding issues, retaining customers and protecting its bottom line. --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---