Downtime to Dollars: How 99.9% Uptime Is Hurting Your Business
Downtime to Dollars
Downtime to Dollars
No matter how good your hosting provider is, they can't guarantee that your website will be up and running 100% percent of the time. Unfortunately, when your website is experiencing downtime, that's money lost.
Downtime Explained
So what is "downtime" anyway? Downtime, with regard to the web, is when a particular application (like a website), cannot be accessed by its users. Two different terms are commonly used to describe the varying degrees of system unavailability. "Hard downtime" is the term used when a system is completely unavailable to its users, while" soft downtime" describes a system that is merely exhibiting poor performance. It's easy to see that when users don't have access to a website at all, dollars are being lost, but things like slow website load times actually cost companies three times more money.
Costs Associated With Downtime
Slow functioning websites are particularly troubling for the e-commerce industry. A 2001 study reported that about 30 percent of surfers will leave your webpage if it's not fully loaded in eight seconds. Mark Ehr, an analyst with Enterprise Management Associates mentioned that the patience level of these surfers has now been cut in half: four seconds. If these users are leaving e-commerce-based websites before they can fully load, they will not be purchasing whatever you have for sale.
A formula called "the impact formula" is commonly used to measure the effect that site performance problems have on companies' revenue. One particular study showed that the average success rate for completing transactions across all major e-commerce sectors was 98.59%, which means that the percent downtime was 1.41%. This may not seem like much, but when these numbers are plugged into the "impact formula," it's a loss of about $223 million dollars. When talking about "soft downtime" (websites that took four seconds to load), the average was 13.8%. When this number is plugged into the equation, it comes out to a loss of $654 million dollars. As you can see, a sluggish website can truly hurt your company.
Downtime doesn't only affect your sales, it effects your employee costs as well. Let's say you have 10 employees who can't work due to site problems: 10 X $20/hr salary (for example) = $200. Maybe your users can work, but only doing specific tasks: 100 users who are 20 percent affected equals $400 (100 X $20/hr X .20 = $400). These are merely examples, but as you can see a great deal of money could be at stake for your company.
Indirect costs and online marketing costs are other major issues to consider if you're experiencing a great deal of downtime. Indirect costs being the nonproductive management time that takes place during the downtime, while online marketing costs refer to any outside company you might use to promote your website.
How to make sure your host is living up to their uptime guarantee?
* Make sure your host has a plan of action to handle downtime emergencies
* Make sure your host is being proactive in evaluating your environment to run applications efficiently
Downtime, whether "soft" or "hard" has a negative impact on all aspects of your company: from sales, and employee costs to the various expenses that keep your company operating smoothly. Your website is key, so make sure you're hosting provider knows exactly how important it is to have a fully functioning website. A hosting provider that understands your needs will proactively implement procedures to handle your downtime. The right hosting provider will avoid downtime at all costs; in turn your company will be more profitable.
Downtime to Dollars: How 99.9% Uptime Is Hurting Your Business
By: Bill Featherwear
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