What is the cost for downtime when your ecommerce site is not serving customers?
Author: Howard M. Cohen
The cost of downtime is an issue that is raised frequently, discussed endlessly, and challenging constantly. Yet it is also often questioned! How much does downtime cost exactly?
Across the vast cross-section of different businesses, it really is impossible to pin down an exact cost of downtime. It depends upon how critical the software is to the operation of the business. How much business can still be conducted while the systems are down? This varies widely from case to case, making the calculation vague at best.
The Big Exception – eCommerce
In the case of eCommerce, sales conducted via a website, that website accounts for 100% of the business being conducted, so a fundamental evaluation of loss due to downtime can be arrived at by calculating the number of minutes in a year: 365 days multiplied by 24 hours each day multiplied by 60 minutes each hour multiplied by 60 seconds each minute, or 31,536,000. Divide that into total sales for the year and you now know how much you’re losing for every second of downtime. Sales conducted over a website make it easier because that website is working at all times, making the time calculation as straightforward as possible.
But Wait… There’s More!
Whenever something seems to be too easy to be true, it probably is. And that’s the case here.
Our very straightforward calculation does not take into account an even larger and long-lasting cost, and that’s the cost of business lost when a customer abandons you for a competitor due to the failure of your website’s availability. How many will visit your website during the outage? How many of those will be intolerant of the outage and go elsewhere? How much will those departed customers buy elsewhere going into the future? How much will it cost you to recover them if that’s even possible?
Once again, the loss due to downtime becomes incalculable.
Then there’s also the reputational damage. Those customers who abandoned you have friends who may have potential to become your customers, but not when their dissatisfied friends tell them your website doesn’t work. It’s very likely they’ll exaggerate even one outage into a “lousy website.” How many customers will you never even see due to this damage?
More Evidence Available in the Real World
If you’re still curious and want to learn more about how much others have lost due to system downtime and inactive mission-critical applications, you have an unusually extraordinary opportunity available to you right now to see many examples in action.
The recent Crowdstrike distribution of an improperly tested Microsoft update has produced an enormous number of lawsuits demanding compensation for lost business due to downtime. Pick up any newspaper or turn to your favorite web search engine to find examples of these lawsuits. They abound everywhere.
What to Do?
Your end-goal must be to eliminate all downtime of mission-critical applications, especially eCommerce applications. If you’re fortunate enough to have the budget to hire a team of experienced experts, put them right to work keeping a careful eye on your most vital apps.
If, like many companies, you cannot justify such an enormous expense, you can gain access to the same expertise by implementing Idenxt. Our team of experts put the most sophisticated automation to work for you to make sure your most mission-critical applications run continuously and stand ready to augment the capabilities of that automation with their own extensive experience whenever necessary.
The one thing you can be sure of is that revenue lost to down systems piles up and continues to pile up much longer than you could ever anticipate. Avoid all that loss by making a modest, very budgetable investment in Idenxt mission-critical application protection. To learn more, contact us here.