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12/9/2010
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IT Outages Cost Businesses Billions

North American businesses lose $26.5 billion in revenue each year from IT system downtime with the biggest impact on SMBs, according to a CA Technologies report.

For example, said Fairbanks, "A few months ago, I interviewed about 20 companies that had experienced downtime… one small health food storefront that its order-to-cash system on SQL had two drives in a RAID system fail. They were completely shut down for two to three days while they rebuilt the system that let them take orders. They were able to do a little business manually, but it had a large impact on their revenues and reputation. And since they did not have a good backup strategy in place, the backup failed, so when they were back up, doing taxes later that quarter meant they had to recreate thousands of records by hand."

Given most companies' reliance on IT for daily operations and for sales, it's no surprise that outages of mission-critical IT systems typically means lost productivity and lost revenue. What may be surprising to some are the findings on just how big these costs are -- and that they aren't just for during the time of the outage, but also during the period while systems and data are being restored.

King said, "The numbers are somewhat shocking, the possible losses of billions of dollars, distributed among many companies. On the plus side, smaller businesses can take comfort in the fact that they have more options and opportunities than ever to keep their businesses up and running, including better hardware, and new cloud and managed services."

The results, according to Fairbanks, "mean that the ROI for accelerating data recovery may be greater than people realize. It's important for small businesses to look at the impact of outages and the ROI for faster recovery, rather than just the hard cost of recovery offerings. ROI on data protection and recovery can be realized much faster if you take these statistics into account."

"Over 50% of the companies surveyed do not have a good Disaster Recovery plan in place," Fairbanks noted. "But downtime is avoidable if there's a good plan and solutions in place."

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