Iris Zarecki

The Cost of Data Loss & Downtime to Enterprises

  • December 24, 2014
  • 4 min read

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Some startling data protection statistics have just been released by EMC in its Global Data Protection Index. According to the findings, enterprises have lost $1.7 trillion in 2014 as a result of downtime costs and data loss. These figures represent as much as half of Germany’s Gross Domestic Product. The numbers are deeply concerning to companies that depend heavily on their IT infrastructures, with as much 71% of companies not confident about their ability to recover after disruptions to their infrastructure. Over the past two years, data loss has spiked by 400%.

How Downtime & Data Loss Impact On Business

There are some interesting changes taking place in data loss and how it affects businesses. The overall number of data loss incidents is decreasing, but the actual volume of data loss per incident is increasing. Of the 3,300 respondents surveyed, 64% encountered data loss within the last 12 months. Within that period, a minimum of 3 working days was lost to downtime. 36% of companies reported loss of revenue, and 34% reported delays in product development.

Just recently, the Bank of England suffered a massive system outage when it suspended its Clearing House Automated Payment System (CHAPS). This prevented payments from being made via the Real Time Gross Settlement System. 80% of the payments processed by CHAPS are wholesale or domestic payments. To account for the missed payments, the bank extended its opening hours and managed to process approximately 143,000 payments by the end of day. The Bank of England has come under increasing public pressure to provide greater levels of transparency, competition and innovation. All of its services will now be overseen by the Payments Systems Regulator (PSR).

In another recent event, data storage issues at Jetstar airways led to an IT outage which practically grounded the Jetstar fleet and delayed flights for about 70,000 passengers. The cause was an overnight data storage issue that was fixed early in the morning, but still caused a significant service disruption during one of the busiest travel days of the year.

Facebook also encountered several IT outages lately. The worst one was in June for 31 minutes due to configuration errors of the systems, as the company has explained. The cost of Facebook service outages is estimated at $1,347,222 per hour. This means that this single incident alone cost Facebook over $600,000.

Data Protection Challenges

Data protection is fraught with many challenges including mobile, hybrid cloud and big data business trends. As much as 51% of companies don’t have an efficient DR plan for these parts of their IT infrastructure and believe that those environment are especially difficult to protect. This is concerning given the fact that 30% of primary data is stored in some form of cloud, and this puts companies at great risk.

Disruptions can be decreased by using advanced data protection technologies. This, however, turns out to increase risk – as businesses using three or more vendors lost three times as much data as those who unified their data protection strategy around a single vendor.

Continuous availability strategies have proven themselves as best-practice methods for preventing data loss and outages.

The Stats in Perspective

Even though most organizations believe that data protection is totally critical, 2.33TB of data is being lost on average per company every year. This translates into 24 million e-mails with costs of over $1 million. The numbers are even higher (2.92TB) when referring to the Financial Services industry alone. And what is the cost of downtime? Well, the average cost of unplanned systems downtime is $870,000 per year and here as well, we see that the cost increases when there are more IT vendors. The cost of IT disruptions in the entire market is estimated at $1.7 trillion per year. This divides into $754 billion for data loss and $954 Billion for downtime.

Service/data disruption causesTop causes for disruptions

Staying Ahead of the Curve

Most companies are behind the curve in terms of service and data protection and have to face the expensive cost of data loss and downtime. The rapid growth in IT brings newer workloads and soaring data volumes. And as we can see, maintenance issues and misconfigurations are the root causes of most disruptions. So in order to decrease the risk of a failure companies should take a proactive stand, ensuring their entire IT environment is always aligned with vendor best-practices, so as to maximize resilience.

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