The real cost of IT downtime

In today’s world, where nearly every business is an online business that relies on software, downtime has a direct impact on key business metrics. Simply put, if your website and systems are down, you will be losing money.

Most business owners don’t contemplate the cost of downtime until they are stranded in the middle of a crisis without a clear path towards recovery.  In an ideal world, every business should know the risks of IT downtime and prepare for those risks with a disaster recovery plan, so if, or when, it does happen there isn’t a steep price to pay – either a financial price or a price of your damaged professional reputation.


Primary causes of IT downtime

With our dependency on computer networks, cloud-based tools, and 24/7 uptime expectations the opportunity to crash is always there. The causes of downtime can range from single application failures and temporary internet outages to weather-related emergencies, ransomware, and devastating security breaches. Preparation for all scenarios is difficult at best, and in some cases impossible – instead focus on situations which are most likely to impact your business operations. By calculating the downtime cost, you can identify the areas of greatest monetary impact and focus on those.

The 2017 Unplanned Downtime survey Found that businesses on average experienced two unplanned downtime episodes every 3 years – the most common causes being hardware failure (46%), software failure (40%), system overload (29%), user error (17%) and a security breach (14%).

The costs of IT downtime

A prime example of a massive technological failure is the collapse of British Airway’s website and systems in May 2017 – ultimately this cost them £80 million, plus the IT engineering costs that took to fix it and the huge negative effect on their brand reputation.

According to Gartner, the average cost of IT downtime is $5’600 (£4295) per minute. Looking at the lower end for smaller business, this is estimated at $140 (£107) per hour whilst for the vast multi-nationals this can be as much as $540’000 (£414’236) per hour.

Factors that can determine how much downtime can cost your business can vary by industry, however the big categories are:

  • Lost revenue / orders
  • Loss of employee or operational productivity
  • Client / customer dissatisfaction
  • Potential loss of clients
  • Tarnished brand reputation
  • Employee stress


Clearly if your business operates in the manufacturing field, you have a focus on production and efficiency. And as businesses become more reliant on machines and networks, there are now multiple pressure points where businesses are exposed to situations resulting in crippling production downtime. 

For the professional services industry, it’s more common to outsource their core systems to providers. Therefore it is critical to have stringent service level agreements (SLAs) with all of your providers. Remember, the service provider is accountable for compliance with all data industry regulations and therefore must ensure that backup and disaster recovery solutions are in place.


So when it comes to costly downtime, the best defence is a good offense. Know the risk for your business and ensure you have proactive strategies in place through a reliable IT support team (link to LocalIT page).


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