The Real Cost of Website Downtime

The world’s top internet companies like Amazon, Facebook, Google, and Netflix share a common, dreaded problem that greatly affects business revenues: website downtime. As we know, internet-based companies generate opportunities and sales through paid advertisements, hosting other business lines, and cloud services. If you are a budding online business, you also fear what these giant companies fear. We invest in the best measures to prevent the dreaded downtime. 

What is downtime and why should internet-based businesses fear it? Downtime is when your website becomes unavailable to your customers. When your site is inaccessible, you lost opportunities to make your products or services known to your potential clients. And to make it more dreadful, a study found out that sites that are slow or unavailable can have a lasting impact on customer retention. Sites that went down experienced, on average, a permanent abandonment rate of 9%. Sites that suffered from slow performance experienced a 28% permanent abandonment rate. (Source: Akamai)

The Solution: Website Uptime Monitoring

Clearly, one of the most crucial threats to website performance is downtime or your site’s availability issues. This is where this opposite term comes in – uptime. Online businesses should invest in a very good uptime monitoring service because when your site breaks down, potential revenues and business workflow crash with it. 

It can be hard to point out how your site’s unavailability at a given period can impact your business. But in a survey by CA Technologies across small, midsize, and large companies in North America and Europe, 200 companies were subjected to the said study. These companies did not invest in a reliable uptime monitoring provider as part of the recovery plan in cases of site downtime or outage. Here is what poor uptime monitoring can mean to your business:

  • Small enterprises lose more than $55,000/year in revenue
  • Midsize companies lose more than $91,000/year in revenue
  • Large companies lose more than $1,000,000/year in revenue

The tech giants like Google, Facebook, and Amazon strive to achieve and maintain the 99.999% uptime percentage as the most ideal. What does this percentage mean in particular? 

Uptime PercentageEquivalent Downtime Monthly
99.9999%2.6 seconds per month
99.999%26 seconds per month
99.99%4.4 minutes per month
99%7 hours and 12 minutes downtime per month
Table 1. As shown above, the “five nines” is generally phrased in the industry as reasonably attainable and of high reliability.

Google, for example, went offline for five minutes, and it costs the internet-based company $500,000 of revenue losses from their paid advertisements. (Source: Tammy Everts)

How does uptime monitoring help fix your business website’s availability issues?

Uptime monitoring does not promise you zero downtime. Let us set your mind on that fact. Downtime is inevitable, and it can happen even to the biggest internet-based companies. What it can guarantee is a monitoring service that continuously tests your website’s availability 24 hours a day. And in cases of site outages or downtimes, it sends you push alerts so you can implement your recovery plan in real-time. 

It sends you notifications through a channel that works for you like e-mails, SMS, voice messages, or through direct integrations channel that you use in your company. The key function of an uptime monitoring service is to let you know as soon as possible that your site is down or something went wrong. When you get notified in real-time, you can take action immediately before your customers get annoyed and check out your competitor’s site. 

Let us help you decide if an uptime monitoring service is worth it.

By now, you have already realized that website downtime may affect your business especially if the revenues chiefly rely upon online transactions. The importance of getting an uptime monitoring service is dependent on the type of protection that your business needs. If upon evaluating the risk vis-à-vis the cost of an uptime monitoring service, it turned out that the revenue losses outweigh the cost, then probably it is better to accept the risks. But if it is otherwise, it is always best to be prepared. 

The cost of an uptime monitoring service is given. But, how do we calculate the risks? First, you need to know how much of your business revenues are generated from your website. For businesses that are Software-as-a-Service (SaaS) like Netflix, or a content marketing company like Google or an e-commerce retailer like Amazon, 100% of revenues are generated from their sites. For companies whose websites are created for lead generation, it is assumed to generate 50% of its business income from their websites. 

Let us get specific with the numbers. To calculate your revenue losses due to your website’s unavailability or downtime, you have to get the figures for the following variables:

  • Gross revenue per year (GR)
  • Uptime percentage per year converted in seconds (T)
  • Percentage of generated revenues from the company website converted in USD (PW)
  • Total downtime per year in seconds (TD)

Let us create a fictional website as an example. The company’s gross revenue per year is $15,000,000 with an assumed uptime percentage of 9,198,000 seconds (99%), the total amount of revenues generated from the site is $15,000,000 (100%), and a total downtime of 315,360 seconds.

Losses = (GR/T) x PW x TD

Losses = ($15,000,000/9,198,000) x 1 x 315,360

Losses = $514,285 per year

As you realize the impact of website downtime on your business, you might think that making your site highly available all the time is an unattainable goal, but it does not have to sound exactly like that. Enhancing your business website’s uptime takes a lot of planning and involves budgeting. It not only covers getting a host server that you can afford but it also includes outsourcing a content delivery network (CDN), preparing a recovery plan in cases of the site crashing, and employing a team to manage the website. However, with all of these things to think about, it is a piece of good news to know that getting an uptime monitoring service is one of the least expensive options available to address your website availability issues. 

In conclusion, one of the main obstacles that hold internet-based companies from investing in reliable and proven ways to improve website management is the cost of services. Some companies do not fully understand the cost of not preparing to resolve website downtime. They fail to see the real risk of possible income losses due to a failure to know whether they remain available to their customers all day, every day. Not only are website availability issues involve inaccessibility of the site but they also include compromising your brand reputation and search engine optimization (SEO) ranking. Website downtime can cost your business more in terms of revenue losses. However, there are available uptime monitoring services that might be within your budget. 





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