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Medium businesses lose $867,000 a year to network downtime


SAN JOSE , California , March 9, 2006—In a new study on network downtime, Infonetics Research found that medium businesses (101 to 1,000 employees) are losing an average of 1% of their annual revenue, or $867,000, to downtime.


The study, The Costs of Downtime: North American Medium Businesses 2006, says that companies experience an average of nearly 140 hours of downtime every year, with 56% of that caused by pure outages. Many medium businesses have a hard time closely tracking downtime caused by service degradation because they don’t have the proper network management tools to observe and quantify service degradations.


Applications are the biggest source of downtime, accounting for roughly one-quarter, or $213,000 annually, split 65/35 between outages and degradations. Focusing on the source of application outages could save many organizations a significant amount of money, the report concludes.


Service provider outages are also a vexing source of downtime according to the study, and largely out of the control of the companies experiencing the downtime.


“There isn’t a single problem area that organizations need to focus on, which would be a simpler fix,” said Jeff Wilson, principal analyst at Infonetics Research. “Every decision is critical, from hardware selection, to product setup and from employee training to SLAs with service providers. Human error is the most troubling, because fixes for human error are elusive and require process changes and retraining, which can take a long time and be very expensive.”


Infonetics conducted the study to understand the causes and calculate the cost of outages and service degradations in terms of lost revenue and productivity. They studied seven sources of downtime: network products, security products, cables/connectors, servers, applications, service providers, and e-commerce; and the four common causes: hardware problems, software problems, human error, and service provider error.


To help companies selling products and services that reduce downtime, Infonetics developed a Downtime Cost Analyzer that can calculate network downtime for prospective customers.

Download study excerpts at For sales, contact Larry Howard, vice president, at or +1 (408) 583-3335.

Infonetics Research ( is an international market research and consulting firm specializing in data networking and telecom. Services include market share and forecasting, end-user survey research, service provider survey research and capex analysis.

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