A cybersecurity expert explains the damage caused by downtime

Network and system reliability have become critical factors in organizational success. According to NordLayer calculations based on external data, the typical company sees 466 hours of cybersecurity-related downtime. The average cost of downtime across all industries has historically been about $5,600 per minute, but recent studies have shown this cost has grown to about $9,000 per minute. This translates to $250 million annually due to downtime on average.

Downtime, whether caused by cyberattacks, hardware failures or human error, affects businesses of all sizes. The repercussions extend far beyond mere operational interruptions, directly impacting revenue, productivity and customer trust.

“The financial toll of downtime is often underestimated. It’s not just about the immediate loss of business, it’s also about long-term consequences such as damaged reputation and lost opportunities,” says Andrius Buinovskis, head of product at NordLayer. “Even short periods of downtime can have devastating effects.”

How downtime affects businesses

Recent studies have shed light on the widespread nature of downtime incidents and their consequences across various industries. A report revealed that in 2022, 76% of companies experienced downtime.

The financial implications of these disruptions are particularly severe for high-risk industries such as finance, government, healthcare, manufacturing, media, retail, and transportation. For these sectors, the average cost of downtime can exceed $5 million per hour, potentially amounting to $2.3 billion in annual losses.

Another report states that security incidents, particularly phishing attacks, account for 56% of downtime occurrences. The remaining 44% stem from application or infrastructure issues, including software failures. Notably, human error emerges as the primary culprit in both scenarios, underscoring the need for training and safeguards.

In addition, recovery takes businesses typically 75 days to recoup lost revenue. Moreover, the impact on investor confidence can be significant, with stock prices dropping by as much as 9% following a single downtime incident. Full recovery, encompassing both financial and operational aspects, can take up to 79 days.

Tips for business reliance against downtime risks

Buinovskis says if security incidents account for over half downtime occurrences, investing in cybersecurity measures is crucial, such as implementing secure network access solutions, conducting regular security audits and maintaining up-to-date security protocols. Equally important is the prioritization of regular maintenance and updates for both hardware and software to prevent infrastructure-related issues.

“Developing and regularly testing disaster recovery plans is a great practice. When downtime strikes, every minute counts. Teams need to know exactly what to do to minimize impact and recovery time.”

Additionally, Buinovskis emphasizes that implementing backup systems can significantly reduce the risk of data loss and extended downtime. This strategy goes hand-in-hand with the use of advanced monitoring tools to detect potential issues before they escalate. “Many organizations are turning to cloud-based security solutions, which often offer higher reliability compared to on-premises infrastructure,” says Buinovskis. “Cloud services can enhance reliability, but businesses still need to understand their responsibilities in a shared security model and ensure they have proper network security measures in place

Image by freepik.

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