The real cost of downtime and data disruption

By Torlock

Today’s businesses tolerate less downtime every year, so a reliable backup and recovery process can help your company recover quickly from any kind of outage. Threats and risks such as malware, ransomware or even user error and hardware failures can bring your business’s progress to a halt – leading to devastating downtime costs that can even put your company out of business in extreme cases. The key to moving your business forward with resilience is a better solution to backup and recovery.

What are the real costs of downtime?

IDC’s Worldwide State of Data Protection & DR Survey 2021 (source) provides a series of startling statistics on the real implications of downtime and data disruption. The report finds the greatest costs associated with downtime include a lack of employee productivity, direct and indirect revenue loss, organisational reputation and, of course, data loss.

Figure 1: Consequences of Data Disruptions

Damaged Reputation

Organisational reputation can take a massive hit in the event of downtime and, depending on the severity of the disruption, can ultimately lead to customer loss entirely due to a lack of trust. This is particularly true in the event of data breaches which are extremely common in the current climate for businesses of all sizes.

It is safe to say that any damage to a company’s reputation is going to affect the business’s bottom line, so implementing a cybersecurity plan which is pre-emptive rather than reactive is a must to ensure you are not left picking up the pieces and performing damage control but instead stopping attacks prior to them happening.

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Unrecoverable Data

In figure 1 (above), you can see the IDC’s report points to a large number of respondents that have experienced unrecoverable data due to disruption. This can then be further segmented into the particular reason for data loss:

The number one reason for unrecoverable data can be attributed to the length of time between backups, which for most organisations remains at 24 hours.

The second reason is corrupted/encrypted data due to ransomware style attacks whereby a malicious actor holds data ransom (often in return for cryptocurrency) by rendering it inaccessible via encryption.

Interestingly the third reason for unrecoverable data is due to backup/recovery system failures. Routinely testing that your business’s backup plan is actually viable and working is key here as the worst time to find out that it does not work is going to be during a crisis!

The top three reasons for unrecoverable data can be all but eliminated with a Continuous data protection (CDP) backup solution. CDP solutions work by backing up each realtime change as it happens. Maintaining a continuous journal of data changes also makes it possible to restore a system to any previous point in time rather than to a single full backup point for the entire system.

Direct and Indirect Revenue Loss

Lastly, one of the biggest costs of downtime and data disruption is of course going to be revenue.

There are often direct costs involved with actually getting back online which can include paying specialists/consultants but also any employee overtime too. In extreme, cases there can also be the direct loss of finances through hacks themselves (i.e. ransomware attacks that get paid or account details stolen).

Then the previous points on reputation and data loss feed into possible indirect costs through longer term customer loss as well as the loss of prospective customers.

According to the DCMS Cyber Security Breaches Survey 2021, 39% of businesses reported experiencing security breaches or attacks in the last 12 months and in the UK, the average cost of these security breaches and attacks was £8,460. This rose to £13,400 when focusing on medium and large firms. As you can see the problem is widespread and organisations are often paying the ransom when faced with the alternative of downtime and data loss.

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