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The Revenue Drain of Downtime

revenue-drainNetwork availability is a key component of success for small and mid-sized businesses. Regardless of the industry, a company’s network is its lifeline to productivity, connecting customers to the company’s goods and services and employees to applications, emails, files and even basic printing options. When the network fails, employee productivity suffers and the revenue stream slams to a halt.


Network downtime is defined as the failure of any part of a company’s network (this can be workstations, firewalls, routers, operating systems, routers, switches or servers). For companies who host their network in house, outages can rack up major expenses, ranging from lost potential revenue to wasted employee hours, extra labor charges for the in-house IT team and worst of all, a damaged reputation with customers. Gartner research estimates the average cost of downtime for a small or mid-sized business is approximately $42,000 an hour, but for larger companies or e-commerce models, this number can easily reach six figures. If the average company suffers 14 hours of downtime a year (as reported in a 2010 survey sponsored by CA Technologies), then the potential annual cost of network outages could top $588,000. In another study sponsored by CA Technologies, evidence suggests that network downtime can reduce the average company’s earning power by as much as 29 percent. If IT outages are frequent and lengthy, they can cause substantial damage to a company’s reputation, staff morale and customer loyalty.


As business operations rely increasingly on internet-based applications, the availability and performance of a company’s network has a direct impact on that company’s ability to generate revenue, stay on budget and maintain workforce productivity. The major revenue drain for companies hosting in-house IT solutions comes from the time taken for troubleshooting and fixing problems—this is time that could be used on strategic projects that improve the company’s core business.


So what can senior SMB executives do to cut down on the costs and headaches associated with network downtime? For many companies, choosing managed services can be the best option for combating network downtime. In comparison to in-house IT, a managed service provider with a solid record of uptime of at least 99.99 percent can significantly decrease the revenue drain of downtime. A managed service provider can identify problems before they affect a company’s network and can often correct them before the network goes down. Since reducing or preventing network downtime can be one of the biggest factors in preserving revenue, maintaining customer satisfaction and maximizing productivity, managed service providers can save companies money and time by lowering the total cost and headaches associated with ownership of the network. To learn more about reducing your company’s network downtime, contact NetStandard’s consultants at

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