What’s the Average Cost of IT Downtime?

flushing money down the toilet

(4-min read)

System Downtime: Not Just Annoying—Also Immensely Expensive

We’ve all been there. You’re chugging away at a nice productive tick when WHAM—your system goes down. Whether a specific document management system goes offline or your internet connection gives out, you’re stuck. After a few moments, you begin to witness the frustration in the office. People wander out of their offices or cubicles to complain while others sit there, twirling pens or playing solitaire. Though immensely annoying, IT downtime is also immensely expensive. Not only has the productivity of these hourly or salaried employees dropped to virtually zero, but customers and clients’ requests are often dead in the water. So, just how expensive is IT downtown on average? 

$5,600 a minute. 

This number comes to us from the research company Gartner. Simple math puts the hourly cost to around $336,000. According to another survey cited by Gartner, this number can vary between $140K and $540K per hour depending on company size, risk tolerance, and various other considerations. 

Damage to Reputation

A number much more difficult to calculate is how much IT downtime costs in terms of your company’s reputation. Even one significant shutdown event can result in customers taking their business elsewhere or may deter would-be customers from doing business with your organization in the first place. If your company develops a reputation for having an unreliable customer-facing system or even just slower follow-up on the backend, leads are likely to take their business to companies with a more robust, reliable IT infrastructure. 

Cost of System Distractions

Another consideration related to system downtime is staff refocus. Have you started working and, after a while, felt your focus narrow…but in a good way? Before, you were torn between your phone, news websites, and a co-worker talking about his weekend. Now, you’re in the zone—coming up with great work ideas, knocking out tasks, and solving problems with the concentration of a surgeon. This level of focus is what experts call a “flow state.” 

Then, wham—the system goes down. After a while, the system comes back online—and your focus needs to as well. But the damage is done and concentration is hard to find.

If this happens a few times a year, it may not be any big deal. Perhaps you needed a coffee break. If this occurs every few weeks, it starts to become annoying. If this happens any more than that, the ability to regain your productive focus is compromised.

If this were a single individual and an infrequent occurrence, it wouldn’t be as big a deal. Unfortunately, this isn’t usually the case. Large companies with specialized, high-dollar team members depend on these experts to remain in focused flow states as much as possible. According to a study by the University of California Irvine, it takes the average person about 25 minutes to regain their focus once distracted (it’s actually 23 minutes, 15 seconds—but who’s counting?). This means that every time you check Instagram at work, though you were scrolling down the timeline for 5 minutes, it will take your brain over 20 minutes to hop back into what you were doing entirely. 

If you wanted to calculate the annual focus-recovery-cost of IT downtime: 

  • Take your number of staff members (S)
  • Determine their income by minute ($)
  • Add up all of your system outages last year (Y)

(S x $) x (Y x 23.25) = The annual cost to regain focus after a system outage

If you were employing 10 people, each making $40,000, and you had 8 outages, that means it would cost around $595 a year just in the time needed for them to regain focus on the task they were working on before a system outage. Scale this up for higher-earning employees across larger companies, and they can expect to pay thousands just to “clear out the cobwebs” following system downtime. 

Importance of Managed Systems

Just like the underdeck crew of a ship that’s had its hull compromised, having a team of experienced IT professionals can be the difference between sinking or reaching your destination. In addition to crew members, the right specialist investment in your company can make your ship resistant to such issues that would otherwise result in expensive downtime.