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December 10, 2010

North American businesses lose $26.5bn annually from avoidable downtime: CA Technologies

Downtime reduces the average company's ability to generate revenue by 29%

By CBR Staff Writer

North American businesses are collectively losing $26.5bn in revenue each year as a result of slow recovery from IT system downtime, according to a study by CA Technologies.

The report revealed that downtime reduces the average company’s ability to generate revenue by 29% and the average respondent suffers 10 hours of IT downtime a year, which translates to more then 1.6 million hours across North America.

The survey of 200 companies across North America showed that during these periods of downtime, respondents estimate that their ability to generate revenue is reduced by nearly a third (29%); and even after service is restored to critical systems, businesses experience an additional 7.5 hours of compromised operation because of the time it takes to recover lost data.

The study revealed that during the post-outage impairment, respondents ability to generate revenue is still reduced by an average of 17%.

The study found that much of this considerable cost to businesses and the economy can be avoided through better data protection strategies that enable more rapid recovery of critical services.

In addition, the study also found significant differences across market segments, such as financial services (where companies lost an average of $224,297 per year) and the public sector (with agencies losing only $99,094 per year).

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This was due to the amount of revenue generated by those respective segments since the public sector experienced the highest amount of downtime (16.6 hours per year compared to the overall average of 10.0 hours).

The study also revealed that 71% of companies surveyed said that the IT services affected by outages were mission-critical; the departments most likely to experience downtime were operations (62%), finance (48%) and procurement (39%); and small companies suffer the most during periods of downtime, showing the least ability to generate revenue (39% compared to 19% for medium-sized companies and 28% for large companies).

Further, a parallel study that was conducted across 11 European countries in July 2010 showed that on an average North American businesses lose less revenue than their European counterparts ($159,331 vs. $349,014 per company).

The primary reason for this is that, although the two regions had a similar number of outages per year (2.2 in North America, 2.3 in Europe), the duration of IT outages in Europe was longer.

The total downtime per outage (including time taken to recover the data) in Europe was 10.3 hours, compared to 7.9 hours in North America.

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