Blog post

The Cost of Downtime

By Andrew Lerner | July 16, 2014 | 16 Comments

Networking

This is a follow-up to last weeks post on network downtime as several have asked “What is the cost of  network downtime?” Based on industry surveys, the number we typically cite is $5,600 p/minute, which extrapolates to well over $300K p/hour (see Ensure Cost Balances Out With Risk in High-Availability Data Centers by Dave Cappuccio).

However, this is just an average and there is a large degree of variance, based on the characteristics of your business and environment (i.e., your vertical, risk tolerance etc). For example, this Avaya study indicates the range is from $140K to $540K p/hour. That said, why rely on averages when you can calculate the outage cost as it specifically relates to your organization?  Check out this research for that:

Toolkit: Downtime Cost Calculator for Data Center Disaster Recovery Planning (Robert Naegle)

http://www.gartner.com/document/2674021

Summary: I&O leaders should understand the potential cost impact of their regional disaster profiles to better evaluate DRM programs and disaster recovery spending.

Q&A: How Much Does an Hour of Downtime Cost? (Bill Malik)

http://www.gartner.com/document/1192213

Summary: Companies that understand how to estimate the cost of an outage, in the for-profit and the not-for-profit domains, can better plan their disaster recovery investments.

Regards, Andrew

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16 Comments

  • firm Gartner says the average cost is over $300,000 an hour though it can be more or less depending on the characteristics of the business environment. Other

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  • Knowles says:

    Is there an RSS feeds for these posts on the costs of downtime?

  • That’s a big cost for a small company and organization

  • Is there an RSS feeds for these posts on the costs of downtime??????

  • zabi says:

    there are many times downtime makes our sites down and less the revenue and ranking as well as

  • Lunovation says:

    That’s a big cost for a small company and organization

  • Network downtime cause a lot trouble to us.

  • That’s a big cost for a small company and organization

  • comfastwifi says:

    Is there an RSS feeds for these posts on the costs of downtime?

  • bigspy says:

    It’s worth noting that not all companies dealing with downtime experience these types of costs, with the most expensive outages costing an organization up to $1.7 million. While there are no updated statistics on downtime, it’s a safe assumption that unplanned downtime costs will continue to rise. By using tools such as downtime timers, companies can now determine the cost of a single outage in terms of lost sales and lost business, based on annual revenue and business hours. It’s worth noting that not all companies dealing with downtime experience these types of costs, with the most expensive outages costing an organization up to $1.7 million. While there are no updated statistics on downtime, it’s a safe assumption that unplanned downtime costs will continue to rise. By using tools such as downtime timers, companies can now determine the cost of a single outage in terms of lost sales and lost business, based on annual revenue and business hours.

  • mestokei says:

    For the organization, this is a huge cost

  • That’s a big cost for a small company and organization.Having read this I believed it was really enlightening. I appreciate
    you spending some time and effort to put this short article together

  • Sino-Inst says:

    That’s a big cost for a small company and organization