Information Technology: Offline? So Are Profits

Feb. 24, 2005
Network downtime drains manufacturers.

Every time a server crashes or a switch goes dark, IT managers aren't the only executives worried as they watch millions of dollars drain from the coffers of their companies across North America. Large companies, including manufacturers, lose an average of $40.7 million a year as a result of IT network downtime, figures Infonetics Research Inc., a market research and consulting firm in San Jose, Calif. It identifies two types of service interruption: degradation, when a service is slower than usual, and outright outages, when a service is unavailable.

"The finance and manufacturing verticals are bleeding the most . . . and manufacturers are losing an average of 9% of their annual revenue," says Jeff Wilson, principal analyst at Infonetics Research and author of a recent study on enterprise downtime. The study says downtime cost manufacturing companies a collective total of 766 hours of productivity and $154 million annually.

"The financial and manufacturing verticals are bleeding the most."
-- Jeff Wilson, principal analyst, Infonetics Research
"The growth of network complexity has produced many more potential points of degradation and failure -- from a backhoe slicing a cable in Kansas to an overly paranoid security device clamping down on all traffic," Wilson states. "Organizations plan IT rollouts carefully, buy network management tools and staff up with quality IT people, but downtime still happens, and the costs can be staggering."

The study, "The Costs of Enterprise Downtime, North American Vertical Markets 2005," is based on responses to questions put to 230 companies with more than 1,000 employees about their network downtime, security product downtime, server downtown and service-provider downtime.

To request highlights from the report, visit

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