Organisations (large, medium, and small) are starting to recognise the hefty costs they are paying for network management tools. No doubt the tools have essential functionality, but is it justifiable to spend so much on them?
Traditional enterprise solutions, such as those from the Big 4 (HP®, IBM®, Cisco®, CA® Technologies), are typically packaged and priced so ambiguously that you often don’t realise the amount of money you’re shelling out to purchase them.
IT budgets are getting leaner, so network administration teams are looking for more economical solutions. It’s not resourceful to purchase “enterprise solutions” that charge you for more than what you really need.
What is Network Downtime?
Downtime refers to periods of time where the network is not accessible. It may be temporarily unavailable, offline, or completely unable to operate. There are many reasons for network downtime such as, equipment failure, outage, upgrades, or ongoing maintenance. If a critical component of the network goes down, this can result in network downtime.
Calculating the Cost of Network Downtime
The smart choice is to spend your budget on network management systems (NMS) that provide a high return on investment (ROI) with a low total cost of ownership (TCO). When you look closely at the Big 4 products, you begin to see the white elephant in the room—a significant amount of budget spent on products that package many features you’ll likely never use.
When evaluating network management tools, you need to look beyond their features and functionality and assess whether you are getting the right value for your investment. ROI and TCO are tricky factors in estimating the net worth of an NMS.
Here are some factors to help you determine the TCO of network management solutions:
- Initial cost of purchase.
- Cost of consultants or professional services to install, integrate, and optimize the deployment.
- Overhead costs of product management (e.g., dedicated IT staff and time required to manage the NMS).
- Cost of learning and getting ramped-up to use the product to its full potential.
- Annual support and maintenance costs.
- Amount of time between acquisition and deployment (product demonstrations, requirement signoffs, budgetary approvals, etc.) where your network is unmonitored.
The Impact of Network Downtime
The cost and impact of system downtime is rapidly rising. This is primarily due to businesses’ increasing dependence on data and technology. The impact of downtime can lead to loss of productivity, lost business opportunities, repetitional damage and so on.
Network downtimes impact all companies – regardless of size. A Gartner study suggests that the cost of Network downtime for a large organisation is around £27,000… per hour of inactivity.
Direct Network Downtime Costs
Understanding the direct costs associated with network downtime is crucial for businesses. Extensive research, including studies conducted by leading organizations like Gartner and IDC, reveals the financial impact of network outages. According to Gartner, the average cost of network downtime can reach up to an astounding £9,000 per minute. However, it’s important to note that the cost varies depending on factors such as organization size and industry. For Fortune 1,000 companies, IDC’s survey indicates that network downtime could escalate to an astonishing £1 million per hour.
The direct costs are imminent fees & expenses associated with the system downtime. Indirect costs have a long-term impact, resulting in a loss of trust in the company.
If your Network is down, this directly affects the productivity of your company. The bigger the company, the more employees sitting around not working, not selling, not producing.
Cost of employee recovery which is the money spent to catch up on work once the IT component has been restored. Besides the basic employee wage, you need to include any additional expenses.
Cost of IT recovery which is how much money was spent to fix the component only accounting for time spent by the in-house IT staff or IT service provider to fix the problem. It should not include the cost of any replacement hardware or software.
Indirect Network Downtime Costs
Indirect network downtime costs refer to the hidden expenses incurred by businesses when their networks experience disruptions. These costs encompass lost productivity, missed opportunities, damaged customer relationships, and decreased employee morale. Indirect network downtime costs extend beyond the immediate financial impact, encompassing intangible factors that affect the overall performance and reputation of a company. By understanding and addressing these indirect costs, businesses can mitigate the long-term effects of network downtime and maintain optimal operational efficiency.
For an e-commerce business, downtimes equal loss of revenue and can also jeopardise future profits and your company’s reputation.
Network downtimes and employee non-productivity can also result in non-compliance penalties. These penalties can increase a company’s costs and reduce profitability. This ties in with loss of revenue due to damaged reputation due to customers being steered away due to the network downtime.
Counter Downtime with Creative ITC
If your company isn’t prepared or doesn’t have the skills internally to quickly resolve network downtimes, then you are putting your company at risk.
As a leading UK partner, Creative has built Network As A Service using SolarWinds technology enabling us to see symptoms of network problems long before they become a problem or outage. We’ve developed this critical service for customers needing dedicated IT monitoring resources without the headache of deploying and operating the necessary tools.
We are also helping IT departments to maximise the use of their investment, as many businesses typically only using 20% of the SolarWinds monitoring capability.