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The cost of downtime continues to increase as do the business risks. An 81% majority of organizations now require a minimum of 99.99% availability. This is the equivalent of 52 minutes of unplanned outages related to downtime for mission critical systems and applications or ,just 4.33 minutes of unplanned monthly outage for servers, applications and networks.                                         

 Over 98% of large enterprises with more than 1,000 employees say that on average, a single hour of downtime per year costs their company over $100,000, while an 81% of organizations report that the cost exceeds $300,000. Even more significantly: three in 10 enterprises – 33% – indicate that hourly downtime costs their firms $1 million or more (See Exhibit 1). It’s important to note that these statistics represent the “average” hourly cost of downtime.  In a worst case scenario – if any device or application becomes unavailable for any reason the monetary losses to the organization can reach millions per minute. Devices, applications and networks can become unavailable for myriad reasons. These include: natural and man-made catastrophes; faulty hardware; bugs in the application; security flaws or hacks and human error. Business-related issues, such as a Regulatory Compliance related inspection or litigation, can also force the organization to shutter its operations. For whatever the reason, when the network and its systems are unavailable, productivity grinds to a halt and business ceases.   

Highly regulated vertical industries like Banking and Finance, Food, Government, Healthcare, Hospitality, Hotels, Manufacturing, Media and Communications, Retail, Transportation and Utilities must also factor in the potential losses related to litigation as well as civil penalties stemming from organizations’ failure to meet Service Level Agreements (SLAs) or Compliance Regulations. Moreover, for a select three percent of organizations, whose businesses are based on high level data transactions, like banks and stock exchanges, online retail sales or even utility firms, losses may be calculated in millions of dollars per minute.

 Those are the results of ITIC’s 2017 Reliability and Hourly Cost of Downtime Trends Survey, an independent Web-based survey which polled over 800 organizations in April/May 2017. All categories of businesses were represented in the survey respondent pool: 24% were small/midsized (SMB) firms with up to 200 users; 25% came from the small/midsized (SME) enterprise sector with 201 to 1,000 users and 51% were large enterprises with over 1,000 users. 

These statistics are not absolute. They are the respondents’ estimates of the cost of one hour of hourly downtime due to lost revenue and lost end user productivity. Additionally, these figures do not take into account the cost of additional penalties for regulatory non-compliance or “good will” gestures made to the organization’s customers and business partners that were negatively impacted by a system or network failure. In fact, these two conditions can cause downtime costs to skyrocket even further.

The overarching message is clear: downtime of even a few minutes is expensive and unwelcome. Only two percent of enterprise respondents said that downtime costs their companies less than $100,000 in a single 60-minute time period. Downtime costs are similarly high for small and midsized businesses (SMBs) with one to 150 employees; some 47% of SMB survey respondents estimate that a single hour of downtime can cost their firms $100,000 in lost revenue and end user productivity. To reiterate these figures are exclusive of penalties, remedial action by IT and any ensuing monetary awards that are the result of litigation, civil or criminal non-compliance penalties.There is well documented evidence from a variety of sources that track the skyrocketing cost of downtime.  The expenses and losses associated with downtime continue to climb in the Internet age where business is conducted 24 x 7 across global time zones. Hourly losses of hundreds of thousands or millions per hour or even minutes in transaction-heavy environments are unfortunately commonplace.

 ITIC’s survey revealed that for large enterprises with over 1,000 employees, the costs associated with a single of hour of downtime are much higher, with average hourly outage costs topping the $5 Million (US Dollars) mark for nine specific verticals. These include: Banking/Finance; Government; Healthcare; Manufacturing; Media & Communications; Retail; Transportation and Utilities. The ITIC survey data revealed that although monetary losses topped users’ list of downtime concerns, it was not the only factor worrisome to organizations. The top six business consequences that concerned users are (in order):

  • Transaction/sales losses
  • Lost/damaged data
  • Customer dissatisfaction
  • Restarting/return to full operation
  • Damage to the company’s brand and reputation
  • Regulatory compliance exposure

The message is clear: unplanned downtime is costly and unacceptable from both a business and technology perspective. Organizations must proactively work with their infrastructure and cloud vendors to ensure the inherent reliability of their systems, applications and networks. This is imperative as the industry moves to interconnected Internet of Things (IoT) ecosystems.

ITIC’s coverage areas continue to expand and evolve based on your feedback. We will now feature Q&As with industry luminaries and experts discussing hot industry trends and technologies.

Longtime security professional, Stu Sjouwerman is the founder and CEO of KnowBe4.com a “New-school” IT security firm based in Tampa, Florida. It specializes in on-demand Internet Security Awareness Training (ISAT). The company’s goal is to enable organizations to quickly solve the increasingly urgent security problem of social engineering and avoid attacks before they occur. Sjouwerman also publishes an Electronic newsletter called Cyberheist News.

Prior to founding KnowBe4.com, Sjouwerman was president, CEO and founder of Sunbelt Software – now ThreatTrack Software which makes the VIPRE security package, originally developed by Sjouwerman and his team at Sunbelt Software. For 17 years he was also the editor of the popular WServerNews electronic newsletter which had a worldwide distribution of 400,000.  ITIC recently sat down and interviewed Sjouwerman about security threats, how companies can defend themselves and avoid common mistakes.

ITIC: Tell us about KnowBe4:

Stu Sjouwerman: We are the “new school” or next generation security awareness training. Old style security tactics and training don’t cut it anymore. In the Digital Age of sophisticated and dangerous Ransomware and increasingly dangerous and prolific Cyber attacks, it’s not enough to follow dos and don’ts. KnowBe4 offers training and advice to assist businesses in combating the latest threats. For example, we will perform fully automated simulated phishing attacks. This lets corporations identify who the culprits are in advance of an attack. It’s proactive and preventive. We train people to be well aware of all of the latest threats from Ransomware to Internet of Things (IoT)-based Denial of Service (DDoS) attacks to phishing attacks that are out there. Our main focus is on phishing attacks but it’s not our only focus.

ITIC: Ransomware attacks are happening with alarming frequency and the Wanna Cry attack on Friday, May 12th was the worst yet. To date it’s infected corporations in 150 countries and over 200,000 machines worldwide. Surprisingly, Security firms have stepped in with fixes and sound advice, but the threat of Wanna Cry and other Ransomware attacks still persists. What’s KnowBe4’s position?

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ITIC’s coverage areas continue to expand and evolve based on your feedback. We will now feature Q&As with industry luminaries and experts discussing hot industry trends and technologies.

Cisco is one of the preeminent high technology companies and a market leader in networking for the last three decades. Cisco’s technologies and market strategies continue to evolve along with those of the overarching high tech industry and its expanding customer base. Cisco is expanding its presence beyond networking and becoming a driving force in The Internet of Things (IoT) and Data Analytics. Michael Flannagan is Vice President and General Manager of Cisco’s Data & Analytics Group. He is responsible for the company’s data and analytics strategy, and leads multiple software business units. This includes: Cisco’s Data Virtualization Business Unit; Cisco’s Analytics Business Unit and Cisco’s ServiceGrid Business Unit and Cisco’s Energy Management Business Unit. ITIC Principal Analyst spoke to Flannagan in-depth about Cisco’s recent analytics acquisitions and the increasingly prominent role analytics will play in Cisco’s products and strategy.

Laura DiDio, Cisco is upping its game with IoT Edge Analytics/Data Analytics, the acquisition of ParStream and its recent partnership with IBM to incorporate Watson’s cognitive computing and AI capabilities onto Cisco edge routers. Can you provide us with insight into the tangible positive impact that IoT Analytics is having both in the data center and at the Edge in terms of business and technical advantages – e.g. performance gains, positive impact on manpower and device resources, cost savings, driving top line revenue, lowering TCO, accelerating ROI and also helping to increase reliability and mitigate risk?

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