The Costs of Internet Outages

A shocking statistic from The Atlantic shows us just how integrated the web has become in our daily lives. An estimated one-third of American companies would lose up to $20,000 each minute of an internet outage. The monumental number comes in response to an outage that occurred in 2016 when DDoS attacks brought major disruption to Amazon’s cloud computing service and brought down a vast portion of the web.

The costs of internet outages - downtime.
The Effects of Internet Outages. Photo by Christopher Gower on Unsplash

Most of us don’t really perceive the impact an outage might have on our working lives, apart from the immediate inability to send mail, access major search engines, and convey critical information quickly. The fact is, internet providers today serve an important role in the growing economy. Here are a few of the costs that businesses face whenever there’s an internet outage.

Costs of Payroll

The most obvious cost is the amount of money lost to productivity. For a major outage, an office might have to completely shut down for a day, but minor outages can carve entire hours out of a normally productive day. Even with some office upkeep, there’s only so much a worker can accomplish in today’s business climate without the web at one’s disposal.

Employees who utilize a client management system to call or interact with customers might be locked out. Company live chat services would come to a halt, rendering the entire customer service department of any company useless until service is restored.

Basically, multiply every hour of outage times the hourly salary of each employee who needs the Internet to work and you begin to see the staggering costs involved.

Halting Transactions

Another side effect is the stopping of payment processing. An internet connection is required for most modern payment systems, so an outage would make it impossible to take customer’s payment information unless the retailer had a manual paper and pen system. Even with such a manual system in place, the storing of sensitive information on site presents a massive security risk.

Customers might line up around the block to buy a product, but if they can’t swipe their card to make the purchase they will seek out other retailers.

Lost Business

If your business relies on the web for sales purposes, and your site is down, you essentially lost your storefront until service is restored. That’s a major blow to businesses making the transition to e-commerce. Merchants who sell with another site are more or less at the mercy of that site’s Internet infrastructure.

Merchants who relied on Amazon got a chilling wake up call when the service went down in 2016. Today, more offices are looking into creating alternative networks, so business can continue even while an internet outage is occurring.

Breakdown of Communication

When KQED in San Francisco experienced an internet outage attributed to ransomware, it felt like the public radio news organization had gone back in time. News broadcasts had to be timed by stopwatch, while employees hand read paper manuscripts to fact check and scrutinize the work.

We don’t really think about all of the key communication infrastructure that would be lost to us if our internet went down. If your company uses a VoIP system, an internet outage can completely cripple the phone system, destroying lead generation and sales for many companies across the US.

Final Thoughts

The new threat is ransomware, which has primarily been aimed at hospitals, schools and major banks. This kind of malware is trickling down to smaller businesses, as hackers look to exploit a wider number of targets for a better payout. End user education is a good way to mitigate this kind of downtime, but proper security measures are now a requirement for doing business in the modern age.

Anne Lawson is a British writer who keeps her eye on business and trending issues that affect us all. She loves to delve into the real story and give us interesting tidbits we might otherwise miss.