The True Cost of Downtime

Downtime – a period in which a company cannot operate to its normal capacity due to a technological failure – is not only an inconvenience but can also be extremely costly.

Here, we’re going to look at the true cost of downtime for firms, while detailing how VC4’s Service2Create platform (S2C) could help this to be reduced significantly for telecom service providers in the future.

How Downtime Impacts Business Revenue and Resources

Many reports into the financial implications of downtime have been carried out in recent years, all with slightly different conclusions. However, the one thing they do all agree on is that it needs to become a notion of the past, sooner rather than later, to prevent firms from losing money, especially in a tough economic climate.

The results of a study carried out in late 2013 by the Ponemon Institute and sponsored by Emerson Network Power priced the cost of downtime for US companies at $7,900 (€6,134 or £4,762) per minute, which is not only a significant sum, but also indicates a rise of 41 per cent from just three years earlier.

Chairman and founder of the Ponemon Institute Larry Ponemon commented: “Given the fact that today’s data centers support more critical, interdependent devices and IT systems than ever before, most would expect a rise in the cost of an unplanned data center outage compared to 2010. However, the 41 per cent increase was higher than expected.

“This increase in cost underscores the importance for organizations to make it a priority to minimize the risk of downtime that can potentially cost thousands of dollars per minute.”

In addition to this, CA Technologies also attempted to calculate the financial implications of downtime in its own report, carrying out a survey that found companies in the US experienced an average of 14 hours of downtime each year, with 18 per cent describing this as “very damaging” for their reputation.

Vice-president of product management at CA Technologies Steve Fairbanks explained: “A lot of times, companies don’t fully understand the cost of not preparing, so as a result, they are not willing to spend dollars to ensure disaster doesn’t occur, or they can recover quickly from a disaster.”

Therefore, in light the findings of both of these investigations into downtime and its implications, it is clear that firms relying on technology need to make sure they are adequately prepared should a technical disaster strike.

The Broader Implications of Downtime

Downtime impacts more than just a company’s bottom line—it affects reputation, customer trust, and even long-term business viability:

• Customer Dissatisfaction: Frequent outages can lead to customer churn, especially in the telecom industry, where reliability is paramount.
• Reputational Damage: Negative customer reviews and word-of-mouth complaints can harm a company’s image, making it harder to attract new customers.
• Operational Inefficiency: Downtime forces businesses to divert resources to emergency fixes instead of focusing on growth-oriented tasks.

How VC4’s S2C can help in Reducing Downtime

At VC4, our S2C platform can help to reduce costly downtime for businesses, as its Single Point of Failure (SPOF) calculation assesses the network to identify part(s) of a network which, if it fails, will stop one or multiple (customer) services from working. In addition, its fault-handling and trouble ticket capabilities mean issues can be dealt with quicker within the system, before they manifest into bigger, more expensive problems. 

VC4 Service2Create has the ability to automatically carry out a variety of tasks, with SPOF analysis one of the most important in relation to preventing downtime. 

Users of the software can properly plan network changes in the system in combination with Automatic Planned Work Analysis to verify which customer services will be affected, once again helping to stop costly downtime from occurring.

Conclusion: Downtime Prevention is Key

By investing in solutions like VC4’s Service2Create platform, businesses can minimize risks, improve operational efficiency, and stay ahead in a competitive market. With features like SPOF analysis, fault handling, and planned work assessments, S2C is the key to reducing downtime and its costly consequences.

Contact VC4 today to learn more about how S2C can help your business prevent downtime and maximize efficiency.