If time is Money, How Much does Downtime Cost?

Benjamin Franklin first coined the phrase “time is money”.  So when your website goes down, even if only for an hour, how much has it “cost” you?

In 2008 online retailer had a two hour downtime.  In this not time not only did it lose around $29,000 – $31,000 per minute (total loss estimated at $3.6 million) but the share price fell by 4.1% on the day – wiping around $3.12 billion off their stock market value.

Amazon isn’t alone in falling prey to website downtime.  eBay reportedly lost around $4 million in revenues from one of its many infrastructure fall-downs; perhaps its worst episode coming back in January 2001 when the auction site was down for over ten hours after its both its main servers and back-up systems failed.

But as we saw in an earlier blog post – “The Importance of Website Monitoring” it’s not just lost revenues that you should be concerned about when your website goes down.

During the downtime at Amazon and eBay where did their customers go?  Whilst some may argue that Amazon customers simply came back later, knowing it to be a temporary fault, is this really the case? Isn’t it far easier for customers in that “ready-to-purchase” frame of mind to simply click away to another website and buy that book, CD or DVD they’ve been looking for?

When UK food retailer Sainsburys experienced its own downtime in 2008, the big-data company Experian noted that 8.36% of Sainsburys’ traffic went to its main competitor and a further 1.38% went to ASDA.  And of that 10% or so of traffic that went to competitors, did they ever go back to shop at Sainsburys online again – or at least to the save extent?

There seems little doubt then that unless you’re in an online business where you are truly the only player in the market, or your brand is really that strong and dominant, you cannot afford to allow your website to go down.

The lesson to take away?  Perhaps that no company is too big to fail? Yes in part – however big your infrastructure nothing is fool-proof and 100% uptime cannot be guaranteed. But perhaps the bigger lesson – eBay’s 2001 downtime was reportedly due to the company failing to upgrade its hardware as had been recommended. By cutting corners you’re only damaging the long-term success and stability of your business.

But most of all make sure you use website monitoring.  This way the moment there is a problem with your website you’re on to it, getting the problem solved before you’ve lost your customers and your reputation!


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