Downtime Dilemmas for MSMEs

BANGALORE, INDIA:

Micro, Small and Medium Enterprises (MSME) will contribute 22% to India's GDP by 2012, according to a study by Associated Chambers of Commerce and Industry of India (ASSOCHAM). The contribution according to the study was 17% in 2009.While MSMEs showcase such success rates, they still face a number of impediments including the financial and technological constraints. When it comes to finances, banks are reluctant to lend to MSMEs due to their higher risk profile owing to zero collateral or their limited years of operations. MSMEs have access to only 15 percent of funding coming from internal sources, 25 percent from banks and financial investments, and 10 percent from capital markets.

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What exactly is downtime?

The term downtime is used to refer to periods when a system is unavailable. It is a period of time that a system fails to provide or perform its primary functions. The impact of downtime is directly proportional to the significance of the specific 'system' in a business process. Downtime issues are seen as a significant deterrent to a user as well as the business.

Impact of downtime on M & SMEs?

As per estimates by Symantec in its 2011 SME Disaster Preparedness Survey, the median cost of downtime for an SME is about $12,500 per day. Outages cause customers to leave -54 percent of MSME customer respondents reported they have switched MSME vendors due to unreliable computing systems, a 12 percent increase compared with last year's survey. This downtime can also put them out of business. When MSMEs experience downtime, it costs their customers an average of $10,000 per day. In addition to direct financial costs, 29 percent of the customers surveyed lost 'some' or 'a lot' of important data as a result of downtime impacting their MSME vendors.

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