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Unignorable Risks: The Consequences of Application Downtime

This guest blog was contributed by Doug Barney, Tech Evangelist, Progress Overview of Application Downtime and its Potential Impact

Applications are core to today's businesses, with the exception of a kid's lemonade stand – and even here, we're not so sure. When applications fail, the business grinds to a halt. Employees (especially the CEO), customers, prospects and business partners all expect your company's applications and website to be available 24x7.

Importance of Addressing Downtime Risks

IT downtime leads to losses in three key areas: productivity, business and precious IT time. Consider these data points:

Downtime costs enterprises 26.5 billion dollars in lost revenue each year.

Downtime costs customers. When systems are down, customer frustration rises. While some loyal customers come back, many turn to your competition whose application was up.

Downtime costs Search Engine Optimization (SEO). Website availability is critical to good search rankings. Google values consistent and available systems and punishes sites with downtime.

Impacts of Unplanned Downtime

Negative impacts of downtime include:

  • Lost Productivity

  • Reputational Damage

  • Lost Sales

  • Missed Business Opportunities

  • Costs of Downtime

We'll dive into each of these one by one.

Lost Productivity and Downtime's Effects on Staff Job Functions and Workflows

When critical applications go offline, your staff can't do their jobs. Productivity either slows dramatically or disappears completely. If the downtime is isolated, it can still affect others in the organization whose applications are operational. That seemingly isolated downtime can now become a companywide problem. Communications with other employees can be disrupted, and workflows unable to be executed.

Reputational Damage: Influence on Clients and Business Partners

The same downtime that aggravates employees can infuriate clients or business partners reliant on your applications and services. The result: serious and lasting reputational damage.

Customers and partners expect a seamless user experience. Disruptions to services, however small they may seem, can (and will) drive them to other services and competitors. The more frequent the outages are, the more this is true. Damage to your reputation is multiplied if the downtime is due to a cyber-attack resulting in a data breach.

Things get worse if the public learns of the attack, and if the downtime is severe enough, they will.

The Role of Frequent Outages and Cyberattacks

Cyber-attacks, such as Distributed Denial-of-Service (DDoS) attacks, are a common source of downtime. If the attack crashes an online service, the consequences are terrible and the financial implications severe.

Take the case of a sales channel. If this goes down or fails, transactions cannot be completed. Those sales are lost, and word may get around that your company is not reliable.

The Connection Between User Experience and Business Partnerships

Customer-facing apps often deserve the most performance and uptime. After all, don't you want customers and prospects delighted by your application speed — or would you rather lose them to your rival because the website or ordering system is too slow?

Employee productivity is nothing to sneeze at, either. Slow software makes for unhappy, inefficient workers.

Lost Sales and the Impact on Online Shopping Applications

People move to other services when they don't get the experience they expect, resulting in lost sales in an online shopping application. According to research, 50 percent of customers will simply abandon their shopping cart if it takes three seconds or more to load — and the reputational damage has even greater long-term consequences. Even scarier, if your website doesn't load in two seconds, 87 percent of visitors give up.

This shows that an application doesn't have to be completely offline to harm the business. A slow app can lead to lost sales and revenue and turn off customers almost as much as downtime.

Lost Business Opportunities

In addition to direct loss of sales, an offline or slow application with poor user experience will lead to missed business opportunities. Potential clients using your web application as part of their product evaluation process will move on to competitors if their user experience is not top-notch. The same is true for potential B2B partners using your online applications to see if they could work with your organization.

The Cost of Downtime, Shutdowns in Manufacturing and Hidden Costs

The cost of downtime differs for each organization and depends on what systems and applications actually go down. Even minor cases will make the CFO choke once the damage is tallied. The costs of a downtime incident in dollars can range from low five figures up to high six-figure sums for larger organizations if the outage is severe. For Fortune 1000 companies, downtime costs can even be millions of dollars per hour.

According to a TechChannel article, "Enterprise downtime is now more expensive than ever: Some 44 percent of firms indicate that hourly downtime costs exceed 1 million dollars to over 5 million, exclusive of any legal fees, fines or penalties," the website said.

"Additionally, 91 percent of organizations said a single hour of downtime that takes mission-critical server hardware and applications offline averages over 300,000 dollars due to lost business, productivity disruptions, and remediation efforts. Meanwhile, only 1 percent of organizations—mainly very small businesses with 50 or fewer employees—estimate that hourly downtime costs less than 100,000 dollars."

Meanwhile, Gartner calculates the average cost of downtime for a small- to medium-sized (SME) business at 5,600 dollars per minute and higher for larger enterprises.

These costs are prompting smart IT pros and CFOs to demand greater uptime and performance. The ITIC Hourly Cost of Downtime Survey finds that enterprises are aiming to increase network uptime. In fact, 89 percent of organizations polled now demand at least 99.99 percent availability, with 35 percent aiming for 99.999 percent uptime.

Overlooked Expenses from Downtime Incidents

Seasoned IT pros know downtime costs a mint, what with lost productivity and missed current sales. These short-term sales losses can turn into lost long-term sales if the customer switches providers.

One overlooked expense is the IT team's time and resources used to analyze, troubleshoot and restore dead or ill-performing systems. Downtime takes IT away from planned activities and projects aimed at improving the business.

For employees, downtime can force them to work manually, resorting to paper records and processes for the duration of the outage. This work, recorded on paper, must be inputted into applications when the software becomes available.

Other overlooked expenses include:

  • Damage to SEO

  • Customer Make Goods

  • Cost of not meeting SLA requirements

  • Increased customer support calls

  • Lost partner trust

High Availability and Load Balancers

To mitigate downtime risks and achieve high availability, load balancers eliminate unplanned downtime.

Mitigate Hack Attacks such as DDoS with Load Balancing

Load balancers are, in essence, servers and, as such, can be equipped with all kinds of applications, including security solutions.

Three Ways Load Balancers Help Mitigate DDoS Attacks

A load balancer can ensure that all server connection requests pass a CAPTCHA security prompt. A load balancer demands this for each connection, including unauthenticated requests. CAPTCHA blocks cyber criminals from overwhelming your IT infrastructure, such as a web server, with requests. Instead, these bogus and voluminous requests are caught by the load balancer and done away with when their CAPTCHA authentication is denied.

High Availability Reduces (or Eliminates) Downtime While Boosting Performance

Downtime is awful. Lowtime, or low performance, has the same impact, just in lesser measure.

So how do we get to high availability (HA)? HA can be achieved with load balancing. Instead of directing a request, such as an application request to the same server every time, a load balancer first determines the ‘load’ on that server. If the server is busy with a load over the threshold set by IT, those requests are instead directed to a server with more availability.

Now we can have a pool of backend application servers. These servers can be physical, virtual or run as microservices in containers. With load balancers managing access to a pool of application servers, and blocking and mitigating DDoS and other hack attacks, unplanned downtime is brought to its knees for on-premises applications.

You can go further with Global Server Load Balancing (GSLB), which keeps applications available during a disaster. With GSLB, IT can now load balance services and applications across geographically spread data centers and keep software running even if a major data location is taken offline by a disaster or extreme cybercriminal attack.


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