Business continuity technologies have come a long way over the past decade, making high-quality data protection accessible to small and mid-sized businesses as well as large enterprises. However, the latest disaster recovery statistics reveal that modern businesses still face costly interruptions due to a variety of threats, ranging from ransomware attacks to sudden hardware failures to hurricanes.
As businesses rely more heavily on their data, IT disruptions have become increasingly costly. During a period of downtime, organizations often have idle workers, production stoppages, and revenue losses, with financial consequences that can quickly mount into the millions. Beyond IT, incidents like fires and natural disasters remain dangerous threats that put some companies out of business every year. In order to fully understand the need for thoughtful recovery planning, it’s helpful to look at the full scope of the frequency, costs, causes, and consequences of disasters.
1) From 2019 through 2022, 96% of organizations experienced at least one incidence of downtime
When it comes to disaster recovery, downtime is one of the biggest fears for businesses, so looking at statistics that give a better picture of the frequency and consequences of downtime is a good place to start. Data from a 2023 study by LogicMonitor makes it clear that operational downtime can happen to any company, at any time. The report reveals that 96% of IT managers and decision-makers worldwide experienced at least one outage in the past three years. Many of these organizations experienced multiple downtime incidences in a single year, which leads to ballooning costs and damage.
2) One in five organizations experienced serious outages in the past three years
When downtime becomes a recurring issue, it’s a definite cause for concern, especially if it’s categorized as a severe incident. Brief or low-impact outages may be an inconvenience, but when downtime halts or places substantial limits on an organization’s ability to operate, the economic and reputational consequences are more profound. Unfortunately, according to a 2022 report from the Uptime Institute, 20% of organizations surveyed reported experiencing a severe outage in the past three years.
3) The average duration of downtime after a ransomware attack in the United States is nearly three weeks
Even with the best disaster recovery systems in place, recovery can still take time. For less prepared businesses, it can take days or even weeks, depending on the incident. The longer downtime lasts, the more damaging it becomes. For organizations in the United States, operational downtime resulting from ransomware lasted an average of 20 days during the last quarter of 2021. This marks an increase from the beginning of 2020 when the average number of days was 15. Although five days might not sound like much of a difference, it’s a significant change when every hour of downtime carries such a hefty price tag.
4) For more than 90% of mid-sized and large enterprises, the cost of downtime exceeds $300,000 an hour
Speaking of the cost of downtime, let’s look a little closer at just how expensive it can be. The ITIC 2021 Hourly Cost of Downtime survey found that 91% of mid-sized and large enterprises lose upwards of $300,000 for an hour of downtime. Of that 91%, nearly half have hourly outage costs ranging from $1 million to more than $5 million. This eye-popping statistic illustrates why so many businesses are unable to bounce back after a disaster. The downtime alone is extremely costly, and this amount doesn’t account for the cost of recovery.
5) Companies with frequent downtime have costs that are 16 times higher than other organizations
The cost of a single downtime event is terrifying, and businesses that experience repeated outages and brownouts have even more to fear. LogicMonitor’s IT Outage Impact Study shows that companies with an increased rate of incidents face financial losses that are 16 times higher than those experienced by organizations with fewer outages. In other words, although your business may not be able to prevent every possible downtime event, reducing their frequency equates to far better economic outcomes.
6) Nearly half of organizations have discovered malware infections
Malware can cause a break in continuity when it corrupts your data, crashes your applications, or bricks your servers. A 2021 survey by Cisco found that 48% of organizations detected malware activity on their systems. Because malware is, by nature, deceptive, many more organizations are likely to have experienced infections without realizing it.
7) In 2022, 24% of organizations experienced server downtime due to outdated hardware
Hardware failures are one of the most common causes of downtime. Server drives, network devices, and other components don’t last forever, and when they fail, everything stops. A survey by ITIC found that almost a quarter of organizations associated old and inadequate server hardware with reliability issues and downtime. Organizations that fail to update and maintain their systems may be setting themselves up for otherwise avoidable downtime incidents.
8) More than 60% of organizations say downtime was caused by human error
Human error is another top culprit for downtime. We all make mistakes, and unfortunately, sometimes those blunders can bring down the whole business. According to 2022 figures from ITIC, 64% of downtime events are related to human errors, including inadvertent data loss, device mismanagement, and other accidents.
9) Only 5% of disruptions are caused by natural disasters
Natural disasters get the big headlines, and it’s true that they’re a dangerous threat and require careful planning by businesses. However, as a general rule, they are not as common as other causes of downtime. According to Seagate, a mere 5% of business downtime is caused by natural disasters like floods, fires, and wind. The remaining 95% are associated with hardware failures, human errors, and software failures.
10) More than one in three organizations was affected by ransomware in 2021
Ransomware attacks have become a leading cause of operational disruption due to the way it spreads laterally across a network, rendering servers and workstations useless. A 2021 survey by Sophos found that 37% of organizations experienced at least one ransomware attack. Although this number represents a decline over previous years, this is no time for businesses to let their guard down. The number of ransomware attacks has decreased in part because cyber attackers have begun to focus and target their attacks on specific organizations that they regard as vulnerable.
11) Downtime costs from ransomware reached nearly $160 billion in 2021
Downtime caused by ransomware can be extremely expensive, in part because it can disrupt the entire organization. Even if businesses refuse to make ransom payments to recover their data, they still face significant losses from operational disruptions. According to data compiled by Comparitech, in 2021, businesses in the United States lost $159.4 billion due to downtime following ransomware attacks.
12) 83% of organizations have experienced multiple data breaches
Data breaches are one of the biggest causes of downtime. When data is accessed by an unauthorized party, it can lead to all kinds of security problems, including data theft, privacy concerns, or delivery of harmful malware. According to a 2022 study by IBM, data breaches are a reality for the majority of companies. In the company’s Cost of a Data Breach report, 83% of organizations reported experiencing more than one data breach.
13) The average cost of a data breach in the United States is over $9 million
When data breaches occur, they result in hefty financial losses for businesses. According to IBM, the cost of a data breach for American organizations is $9.44 million, on average. This far exceeds the global average of $4.35 million. Businesses that experience data breaches thus have to address not only potential privacy concerns and litigation but also major financial consequences.
14) Thousands of small businesses experience data breaches each year
Data breaches overwhelmingly occur in small businesses. Verizon’s 2022 Data Breach Investigations Report reveals that the number of small business breaches was more than double the number of breaches in large organizations. This is in part because larger companies have better access to the resources and technology necessary to prevent unauthorized access. Small businesses often don’t invest enough in cybersecurity, and hackers are well aware of this vulnerability, making them an attractive prospect for an attack.
15) 20% of breaches involve internal actors
Here’s another shocker from Verizon’s report. Out of the reported data breaches that Verizon studied, one-fifth of them involved internal actors. In other words, these companies’ employees accessed confidential or sensitive data, often for financial gain. This is compelling evidence that organizations need much stronger security controls on their data, not just for outside threats, but also for their own users.
16) In 2021, 45% of data breaches were cloud-based
It’s not just your physical on-site servers that you need to worry about. Data loss happens in the cloud too, whether it’s at your data center or in SaaS applications, like Microsoft 365 and G Suite. IBM reports that almost half of all data breaches in 2021 occurred in cloud-based systems. These breaches, in combination with incidents such as accidental data loss and overwrites, are ample evidence that businesses face serious threats to data stored in the cloud.
17) Only 52% of organizations can recover from severe data loss within 12 hours
Data loss causes significant disruptions to business operations, and recovering as quickly as possible is essential. According to a 2022 survey, only 52% of organizations were able to restore their critical systems following a severe data loss event in 12 hours or less, and 29% needed a day or longer to get their systems up and running. This is a stark contrast to the 83% of surveyed organizations who said they could tolerate a maximum of 12 hours of downtime due to data loss.
18) 45% of organizations have experienced permanent data loss
A recent study by Arcserve discovered that 76% of surveyed organizations experienced critical data loss. What’s worse is that 45% of those businesses lost their data permanently. When data is irretrievable due to factors like faulty or missing backups, many businesses experience insurmountable short and long-term effects.
19) More than half of small businesses that experience a cyber attack will go under within six months.
When businesses experience cyber attacks, they face life-altering effects, potentially including bankruptcy. For small companies, in particular, an attack is often too difficult to overcome. A recent report resulting from a collaboration between Vistage, Cisco, and the National Center for the Middle Market found that 60% of small and midsize businesses that are hacked go out of business within six months. This underscores the need for organizations of every size to increase their cybersecurity measures.
20) 58% of data backups fail
Organizations rely on backup technology to protect their data, but in many cases, they do so without realizing the potential for failure. Too many businesses use outdated or poorly maintained backup technology that is notorious for malfunctions and incomplete backups. A 2021 study by Veeam found that more than half of all data backups fail, creating significant issues for companies that experience cyberattacks and outages. Testing your backup solution may help avoid these negative outcomes.
21) Almost all ransomware attacks attempt to infect backups
Backups are meant to protect organizational data in the event of a disaster, breach, or attack, and they often do. However, ransomware gangs are fully aware of the increased reliance on backups, and, in response, they’ve developed attacks that are intended to infiltrate backup systems. As detailed in a 2022 Ransomware Trends Report, 97% of modern ransomware attacks attempt to infect not only primary systems but also backup repositories. Not all of these attempts are successful, but they highlight the need for a high-quality backup solution that includes ransomware detection technology.
22) Approximately 25% of businesses never reopen their doors after a disaster
FEMA is well-versed in the effects of disasters, which is why it’s so concerning when they report that around one in four businesses permanently close their doors following a disaster. That includes events such as hurricanes, earthquakes, floods, and even IT incidents, like massive data loss. Small businesses are at an especially high level of risk because they often lack the resources to sustain a prolonged recovery.
23) Just over half of organizations have disaster recovery plans
Despite the risks of potential disasters, businesses are not taking adequate precautions. A 2021 study by Computing Research found that only 54% of organizations have documented disaster recovery plans in place. To prevent and respond to a disaster, every business must have a comprehensive disaster recovery plan (DRP). A DRP helps companies understand the risks that threaten their operations and identify solutions that help to avert disruptions and quickly recover when they occur.
24) Around 7% of organizations never test their disaster recovery plans
A DRP is only good if you’re sure that it works, and a shocking 7% of companies never take the time to test their plans. Of the organizations that do conduct tests, half of them do so once a year or less frequently. Although it’s crucial to develop and implement a DRP, businesses that don’t conduct regular tests may be creating a false sense of security.
25) Three out of four organizations will make digital resilience a priority over the next two years
As disaster threats have grown and evolved over the past decade, businesses have become increasingly aware of the need for greater security and prevention strategies, such as cybersecurity, employee training, and disaster recovery planning. A 2021 survey found that 78% of IT leaders plan to make these steps a financial priority in the coming years. In doing so, they will reduce the chances that their organizations will falter or fail due to ransomware attacks, phishing scams, and other common risks.
Don’t Become a Disaster Statistic
If your business has yet to implement a carefully constructed and tested disaster recovery plan, you may be one emergency away from devastating operational disruptions and financial losses. Rather than becoming another example of a business that fell apart due to poor planning, you can increase the likelihood that you’ll survive an unexpected event by employing sound disaster recovery strategies.
The gloom and doom of disaster recovery statistics can be overwhelming, but the reality for your business doesn’t have to be so bleak. Whether you need support in finding the best data backup solution for your small business, recovering data that’s already been lost, or simply learning more about disaster recovery testing and planning as a whole, the team at Invenio IT is ready to assist you. Request a free demo of the best backup technology on the market or contact the business continuity experts at Invenio IT to learn more about disaster recovery.