2020

Forty Percent of Enterprises Say Hourly Downtime Costs Top $1Million

2020, ITIC Reports & Surveys / By

Four in 10 enterprise organizations – 40% – indicate that a single hour of downtime can now cost their firms from $1 million to over $5 million – exclusive of any legal fees, fines or penalties.

Those are the results of ITIC’s 11th annual Hourly Cost of Downtime Survey.  ITIC polled 1,000 businesses from March through June 2020. All categories of businesses were represented in the survey respondent pool: 27% were small/midsized (SMB) firms with up to 200 users; 28% came from the small/midsized (SME) enterprise sector with 201 to 1,000 users and 45% were large enterprises with over 1,000 users. data indicates that over 98% of large enterprises with more than 1000 employees say that on average, a single hour of downtime per year costs their company over $100,000. These statistics represent the “average” hourly cost of downtime.  In a worst case scenario – such as a catastrophic outage that occurs during peak usage times or an event that disrupts a crucial business transaction – the monetary losses to the organization can reach and even exceed millions per minute.

Once again, as in ITIC’s 2019 Hourly Cost of Downtime poll, only a tiny two percent minority of respondents — mainly very small businesses with fewer than 50 employees – reported that downtime costs their companies less than $100,000 in a single 60-minute time period. Downtime costs are also expensive for SMBs with 200 to 500 employees. Nearly half – 47% – of SMB survey respondents estimate that a single hour of downtime can easily cost their firms $100,000 or more in lost revenue, end user productivity and remedial action by IT administrators. To reiterate, these figures are exclusive of penalties, and any ensuing monetary awards that are the result of litigation, civil or criminal non-compliance penalties.

It’s easy to underestimate the cost of downtime, but it adds up quickly. For example: one minute of downtime for a single server in a company that calculates its hourly cost of downtime for a mission critical server or application at $100,000 is $1,667. The overwhelming majority of firms will have multiple servers impacted in an outage — particularly if those servers are located in the cloud or a virtualized environment. That $100,000 of hourly downtime calculation of $1,667 per minute for a single server quickly grows to $16,670 per minute when downtime affects 10 servers and main line of business applications/data assets!  Downtime costs add up quickly for corporate enterprises. And once again, these are just the costs of the actual downtime. It does not factoring in any lost, damaged, stolen, destroyed or changed data.

Small businesses are equally at risk, even if their potential downtime statistics are a fraction of large enterprises.  For example, an SMB company that estimates that one hour of downtime “only” costs the firm $10,000 could still incur a cost of $167 for a single minute of per server downtime. Similarly, an SMB company that assumes that one hour of downtime costs the business $25,000 could still potentially lose an estimated $417 per server/per minute. Very small SMBs – companies with 1 to 100 employees – generally would not rack up hourly downtime costs of hundreds of thousands or millions in hourly losses. Small companies however, typically lack the deep pockets, larger budgets and reserve funds of their enterprise counterparts to absorb financial losses associated with downtime.

Hourly downtime costs of $25,000; $50,000 or $75,000 (exclusive of litigation or civil and even criminal penalties) may be severe enough to put the SMB out of business – or severely damage its reputation and cause it to lose business.

ITIC’s latest Hourly Cost of Downtime survey revealed that for large enterprises, the price tag associated with a 60 minute outage is much steeper: it routinely tops the $5 Million (USD) mark for the top 10 verticals. These include: Banking/Finance; Food; Energy; Government; Healthcare; Manufacturing; Media & Communications; Retail; Transportation and Utilities.

These highly regulated vertical industries must also factor in the potential losses related to litigation. Businesses may also be liable for civil penalties stemming from their failure to meet Service Level Agreements (SLAs) or Compliance Regulations. Moreover, for select organizations, whose businesses are based on compute-intensive data transactions, like stock exchanges or utilities, losses may be calculated in millions of dollars per minute.

ITIC’s 11th annual Hourly Cost of Downtime Survey,  conducted in conjunction with the ITIC 2020 Global Server Hardware Server OS Reliability Survey – found that an 87% majority of organizations now require a minimum of 99.99% availability. This is up from 81% in the last 2 ½ years. The so-called 99.99% or “four nines” of reliability equals 52 minutes of unplanned per server/per annum downtime for mission critical systems and applications or, 4.33 minutes of unplanned monthly outages for servers, applications and networks.

Overall, hourly downtime costs will continue to soar. And this means that companies of all sizes across all vertical markets will have little or no tolerance for downtime.

 

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ITIC 2020 Reliability Poll: IBM, Lenovo, HPE, Huawei Mission Critical Servers Deliver Highest Uptime, Availability

2020, 2021, ITIC Reports & Surveys, Laura's Insights ITIC Blog / By

For the 12th straight year, IBM’s Z mainframe and Power Systems, achieved the highest server; server operating system reliability and server application availability rankings, along with Lenovo’s ThinkSystem servers which delivered the best uptime among all Intel x 86 servers for the last seven consecutive years, in ITIC’s 2020 Global Server Hardware and Server OS Reliability survey.
ITIC’s latest independent survey data finds that the most reliable mainstream server platforms – the IBM Power Systems, Lenovo ThinkSystem, Hewlett-Packard Enterprise (HPE) and Huawei KunLun deliver up to 26x more uptime and availability than the least dependable unbranded “White box” servers.

The superior uptime of the above top ranked mission critical hardware makes them up to 34x more economical and cost effective than the least stable White box servers.

High end mission critical servers from IBM and Lenovo both registered under two (2) minutes of per server, per annum unplanned downtime due to inherent flaws in the underlying hardware or component parts. Cisco, Hewlett-Packard Enterprise (HPE) and Huawei server platforms were close behind: each recorded approximately two minutes or a few seconds more downtime attributable to inherent issues with the hardware. Among mainstream servers, IBM POWER8 and POWER9, along with the Lenovo x86 ThinkSystem servers; the HPE Integrity Superdome X and Huawei’s mission critical KunLun servers continue to deliver the highest levels of reliability/uptime among 18 server platforms. (See Exhibit 1).

The least consistent hardware – unbranded White box servers – averaged 53 minutes of unplanned per server downtime due to problems or failures with the server or its components (e.g. hard drive, memory, cooling systems etc.). This represents an increase of four (4) minutes of downtime compared with ITIC’s 2019 Global Server Hardware, Server OS Mid-Year Update survey.
ITIC’s independent Web-based survey polled over 1,200 businesses worldwide from November 2019 through March 2020. The study compares and analyzes the reliability and availability of over one dozen mainstream server platforms and one dozen operating system (OS) distributions. To obtain the most accurate and unbiased results, ITIC accepts no vendor sponsorship.

IBM’s System Z server is in a class of its own. It maintained its best in class rating among all server platforms. An 83% majority of IBM respondent organizations said their firms achieved five and six nines – 99.999% and 99.9999% – or greater uptime. Nine-in-10 IBM Z customers reported that the mainframe recorded just 0.62 seconds of unplanned per server downtime each month and 7.44 seconds annually due to inherent flaws in the server hardware or its component parts. Less than one-half of one percent of IBM Z respondents said the mainframe experienced unplanned outages exceeding four (4) hours of annual downtime.

The economic annual downtime cost comparisons among the top performing and the least reliable server hardware platforms is staggering.

A single hour of downtime estimated at $300,000, equates to $4,998 per server/per minute.

According to that metric, organizations using the most reliable IBM POWER8 and POWER9; Lenovo x86-based ThinkSystem; HPE Integrity or Huawei KunLun servers that experienced just under or just over two (2) minutes would spend $9,996 in annual per server downtime costs due to inherent flaws in server hardware or component parts (See Table 2).

By contrast, corporations using Dell PowerEdge servers which experienced 26 minutes of per server/per minute downtime at the same $300,000 per hourly downtime rate potentially would rack up yearly outage costs of $130,026 for a single server.

Corporations deploying the least reliable unbranded White box servers that registered 53 minutes of per server, per minute downtime can expect to incur possible downtime losses of $264,894 specifically related to server hardware flaws and bugs in the OS and applications. The four additional minutes of downtime – from 49 minutes per server in ITIC’s 2019 poll, to 53 minutes of per server outage time in 2020, represents a cost increase of $19,992 compared with the White box server 2019 per server, per minute downtime price tag of $244,902.

Time is money.

The higher monetary costs associated with unbranded White box servers are not surprising. The unbranded White box servers frequently incorporate inexpensive components. And some businesses recklessly run unsupported or pirated versions of operating systems and applications. The aforementioned hourly downtime examples are for just one server. Downtime costs can mount quickly and reach into the millions for corporations with dozens or hundreds of highly unreliable servers.

Survey Highlights

Among the other top survey findings:

• Reliability: IBM Power Systems and Lenovo ThinkSystem hardware and the Linux operating system distributions were once again either first or second in every reliability category, including server, virtualization and security.
• Availability: IBM Z mainframe, Power Systems, Lenovo ThinkSystem, HPE Integrity and Huawei KunLun all provided the highest levels of server, applications and service availability. That is, when the servers did experience an outage due to an inherent system flaw, they were of the shortest duration – typically one-to-five minutes.
• Technical Support: Businesses gave high marks to IBM, Lenovo, HPE, Huawei and Dell tech support. Only 1% of IBM and Lenovo customers and 2% of HPE and Huawei users gave those vendors “Poor” or “Unsatisfactory” customer support ratings.
• Hard Drive Failures Most Common Technical Server Flaw: Faulty hard drives are the chief culprits in inherent server reliability/quality issues (58%) followed by Motherboard issues (43%) and processor problems (38%).
• IBM, Lenovo and Huawei KunLun Servers Had Fewest Hard Drive Failures: IBM, Lenovo and Huawei’s KunLun platforms experienced the fewest hard drive quality or failure issues among all of the server distributions within the first one, two and three years of service. Less than one percent – 0.4% – of IBM Z mainframes, for example, experienced technical problems with their hard drives in the first year of usage, followed by the IBM Power Systems and Lenovo ThinkSystem with one percent (1%) each during the first 12 months of deployment.
• Security is Top External Issue Negatively Impacting Reliability: Security and data breaches now have the dubious distinction of being the top cause of downtime.
• Minimum Reliability Requirements Increase: An 88%majority of corporations now require a minimum of “four nines” of uptime – 99.99% for mission critical hardware, operating systems and main line of business (LOB) applications. This in an increase of five (5) percentage points from ITIC’s 2018 Reliability survey.
• Patch Time Increases: Seven-in-10 businesses now devote from one hour to over four hours applying patches. This is primarily due to a spike in wide ranging security issues such as Email Phishing scams, Ransomware, CEO fraud as well as malware and viruses.
• Increased Server Workloads Cause Reliability Declines: The survey data found that reliability declined in 67% of servers over four (4) years old, when corporations failed to retrofit or upgrade the hardware to accommodate increased workloads and larger, more compute intensive applications. This is up 23% from the 45% of businesses that said uptime declined due to higher workloads in the ITIC 2018 Reliability poll.
• Hourly Downtime Costs Rise: A 98% majority of firms say hourly downtime costs exceed $150,000 and 88% of respondents estimate hourly downtime expenses exceed $300,000. Just over one-third of ITIC survey respondents – 34% – estimate the cost of a single hour of downtime now tops one million ($1,000.000).

Server hardware, server operating system – and by extension, virtualization reliability, uptime and availability are the core foundational elements of the overarching health of an organization’s entire Digital Age ecosystem and the life blood of daily business operations.

The core reliability of corporate servers, server operating systems and the mission critical applications that run on them are absolutely imperative. The inherent reliability of enterprise hardware, OS and applications are necessary to maintain daily, uninterrupted business operations; ensure secure access to proprietary assets; mitigate risk and drive revenue.

ITIC 2020 Reliability Poll: IBM, Lenovo, HPE, Huawei Mission Critical Servers Deliver Highest Uptime, Availability Read More »

ITIC 2020 Editorial Calendar

2019, 2020, Editorial Calendars / By

March/April 2020: ITIC 2020 Global Server Hardware and Server OS Reliability Survey

Description: Reliability and uptime are absolutely essential. Over 80% of corporations now require a minimum of 99.99% availability and greater; and an increasing number of enterprises now demand five nines – 99.999% or higher reliability. But which platforms actually deliver? This survey polls businesses on the reliability, uptime and management issues involving the inherent reliability of 14 different server hardware platforms and server operating system. The survey polls corporations on the frequency, the duration and reasons associated with Tier 1, Tier 2 and Tier 3 outages that occur on their core server OS and server hardware platforms. The results of this independent, non-vendor sponsored survey will provide businesses with the information they need to determine the TCO and ROI of their individual environments. The survey will also enable the server OS and server hardware vendors to see how their products rate among global users ranging from SMBs with as few as 25 people to the largest global enterprises with 100,000+ end users.

The 2020 ITIC Global Reliability Survey has also been updated and expanded to include questions on:

  • Component level failure data comparisons between IBM Power Servers and Intel-based x86 servers such as Dell, HP, Huawei, Lenovo and Cisco.
  • Percentage of component level failure data comparisons by vendor according to age (e.g. new to three months; three to six months; six months to 1 year; 1 to 2 years; 2 to 3 years; 3 to 4 years; 4 to 5 years; over five years).
  • Which component parts fail and frequency of failure
  • A percentage breakout of server parts failures for parts such as hard disk drives(HDD), processors, memory, power components, fans, or other
  • Where available, how the component failed. For example: memory multi-bit errors, HDD read failures, processor L1/L2 cache errors, etc.

 

April/May: 2020 Hourly Cost of Downtime

 Description: Downtime impacts every aspect of the business. It can disrupt operations and end user productivity, result in data losses and raise the risk of litigation. Downtime can also result in lost business and irreparably damage a company’s reputation. The cost of downtime continues to increase as do the business risks. ITIC’s 2019 Hourly Cost of Downtime survey found an 85 % 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. This survey will once again poll corporations on how much one hour of downtime costs their business – exclusive of litigation, civil or criminal penalties. ITIC will also interview customers and vendors across 10 key vertical markets including: Banking/Finance; Education; Government; Healthcare; Manufacturing; Retail; Transportation and Utilities. The Report will focus on the toll that downtime extracts on the business, its IT departments, its employees, its business partners, suppliers and its external customers. This report will also examine the remediation efforts involved in resuming full operations as well as the lingering or after-effects to the corporation’s reputation as the result of an unplanned outage.

 

May/June 2020: ITIC Sexual Harassment, Gender Bias and Pay Equity Survey

 Description:  ITIC’s “Sexual Harassment, Gender Bias and Pay Equity Gap,” independent Web survey polled 1,500 women professionals worldwide across 47 different industries, with a special emphasis on STEM disciplines. The survey focuses on three key areas of workplace discrimination: Sexual Harassment, Gender Bias and Unequal Pay.

 

 

July/August: 2020 IoT Deployment and Usage Trends Survey and Report

 

Description: The Internet of Things (IoT) has been one of the hottest emerging technologies of the last several years. This ITIC Report will present the findings of an ITIC survey that polls corporations on the business and technical challenges as well as the costs associated with IoT deployments. This IoT Report will also examine the ever present security risks associated with interconnected environments and ecosystems. ITIC’s IoT 2020 Deployment and Usage Trends Survey will also query global businesses on a variety of crucial issues related to their current and planned Internet of Things (IoT) usage and deployments such as how  they are using IoT (e.g. on-premises versus Network Edge/Perimeter deployments); the chief benefits and biggest challenges and impediments to IoT upgrades.  Vendors profiled for this report will include: AT&T, Bosch, Cisco, Dell, Fujitsu, General Electric (GE), Google, Hitachi, Huawei, IBM, Intel, Microsoft, Particle, PTC, Qualcomm,  Samsung, SAP, Siemens and Verizon.

 August: ITIC 2020-2021 Security Trends

 Description: Security, security, security! Security impacts every aspect of computing and networking operations in the Digital Age. And it’s never been more crucial as businesses, schools, government workers and consumers are working at home amidst the ongoing Nouvel and damaging security hack impacting the lives of millions of consumers and corporations. This Report will utilize the latest ITIC independent survey data to provide an overview of the latest trends in computer security including the latest and most dangerous hacks and what corporations can do to defend their data assets. Among the topics covered:

 

  • Security threats in the age of COVID-19
  • The most prevalent type of security hacks
  • The percentage of corporations that experienced a security hack
  • The duration of the security hack
  • The severity of the security hack
  • The cost of the security hack
  • Monetary losses experienced due to security breaches
  • Lost, damaged, destroyed or stolen data due to a security breach
  • The percentage of time that corporations spend securing their networks and data assets
  • Specific security policies and procedures companies are implementing
  • The issues that pose the biggest threats/risks to corporate security

 

August/September: ITIC 2020 Global Server Hardware Server OS Reliability Survey Mid-Year Update

Description: This Report is the Mid-year update of ITIC’s Annual Global Server Hardware, Server OS Reliability Survey. Each year ITIC conducts a second survey of selected questions from its Annual Reliability poll. ITIC also conducts new interviews with C-level executives and Network administrators to get detailed insights on the reliability of their server hardware and operating system software as well as the technical service and support they receive from their respective vendors.  ITIC will also incorporate updated PowerPoint slides and statistics to accompany the report.

 

October/November: AI, Machine Learning and Data Analytics Market Outlook

Description: This Report will examine the pivotal role that AI, Machine Learning and IoT-enabled predictive and prescriptive Analytics plays in assisting businesses sort through the data deluge to make informed decisions and derive real business value from their applications. AI and Machine Learning take Data Analytics to new levels. They can help businesses identify new product opportunities and also uncover hidden risks. Machine intelligence is already built into predictive and prescriptive analytics tools, speeding insights and enabling the analysis of vast probabilities to determine an optimal course of action or the best set of options. Over time, more sophisticated forms of AI will find their way into analytics systems, further improving the speed and accuracy of decision-making. Rather than querying a system and waiting for a response, the trend has been toward interactivity using visual interfaces. In the near future, voice interfaces will become more common, enabling humans to carry on interactive conversations with digital assistants while watching the analytical results on a screen. Analytics makes businesses more efficient; it enables them to cut costs and lower ongoing operational expenditures. It also helps them respond more quickly and agilely to changing market conditions – making them more competitive and thus driving top line revenue in both the near term and long term strategic sales. Vendors Profiled: AppDynamics, BMC, Cisco, IBM, Microsoft, Oracle, SAP and SAS. It also discusses how non-traditional vendors in the carrier and networking segments e.g. Dell/EMC, GE, Google, Verizon and Vodafone have fully embraced AIOps and analytics via partnerships, acquisitions and Research and Development (R&D) initiatives and have moved into this space and challenged the traditional market leaders. And it will provide an overview of the latest Mergers and Acquisitions (M&A) and their impact on the Analytics industry.

 December: ITIC 2021 Technology and Business Outlook

 Description: This Report will be based on ITIC survey results that poll IT administrators and C-level executives on a variety of forward looking business and technology issues for the 2020 timeframe. Topics covered will include: Security, IT staffing and budgets; application and network infrastructure upgrades; hardware and software purchasing trends and cloud computing.

Survey Methodology

 

ITIC conducts independent Web-based surveys that contain multiple choice and essay questions. In order to ensure the highest degree of accuracy, we employ authentication and tracking mechanisms to prohibit tampering with the survey results and to prohibit multiple votes by the same party. ITIC conducts surveys with corporate enterprises in North America and in over 25 countries worldwide across a wide range of vertical markets. Respondents range from SMBs with 25 to 100 workers to the largest multinational enterprises with over 100,000 employees. Each Report also includes two dozen first person customer interviews and where applicable, vendor and reseller interviews. The titles of the survey respondents include:

 

  • Network administrators
  • VPs of IT
  • Chief information officers (CIOs)
  • Chief technology officers (CTOs)
  • Chief executive officers (CEOs)
  • Chief Information Security Officers (CISOs)
  • Chief Marketing Officers (CMOs)
  • Consultants
  • Application developers
  • Database Administrators
  • Telecom Manager
  • Software Developer
  • System Administrator
  • IT Architect
  • Physical Plant Facilities Manager
  • Operations Manager
  • Technical Lead
  • Cloud Managers/Specialists
  • IoT Manager
  • Server Hardware/Virtualization Manager

 

 

ITIC welcomes input and suggestion from its vendor and enterprise clients with respect to surveys, survey questions and topics for its Editorial Calendar. If there are any particular topics or questions in a specific survey that you’d like to see covered, please let us know and we will do our best to address it.

 

 

About Information Technology Intelligence Corporation (ITIC)

 

ITIC, founded in 2002, is a research and consulting firm based in suburban Boston. It provides primary research on a wide variety of technology topics for vendors and enterprises. ITIC’s mission is to provide its clients with tactical, practical and actionable advice and to help clients make sense of the technology and business events that influence and impact their infrastructures and IT budgets. ITIC can provide your firm with accurate, objective research on a wide variety of technology topics within the network infrastructure: application software, server hardware, networking, virtualization, cloud computing, Internet of Things (IoT) and Security (e.g. ransom ware, cyber heists, phishing scams, botnets etc.). ITIC also addresses the business issues that impact the various technologies and influence the corporate business purchasing decisions. These include topics such as licensing and contract negotiation; GDPR; Intellectual Property (IP); patents, outsourcing, third party technical support and upgrade/migration planning.

 

To purchase or license ITIC Reports and Survey data contact: Fred Abbott

Email: fhabbott@valleyviewventures.com;

Valley View Ventures, Inc.

Phone: 978-254-1639

www.valleyviewventures.com

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