How Much does Downtime Cost your Business?admin
When was the last time you experienced a power outage at work? How long did it take before work resumed as normal? Did this prevent potential sales, inhibit the completion of a project, or cause a delay in production? The obvious answer is yes, but can you put a monetary value on this lost time? Statisticians have done this exact thing, allowing businesses to determine the estimated cost of downtime. We’ll share some of the basics with you.
Causes of Downtime
System Outages: This usually involves the failure of some type of critical application that leads to the inability to use the application, and possibly the loss of data associated with the application.
Internet Outages: Regardless of your business infrastructure or computer applications, if your internet service goes down, you can’t conduct business as usual. Weather disturbances or downed electrical poles are the most likely causes.
Mis-configurations: Most IT departments implement small changes to the configuration of a system on a fairly regular basis. When these changes are done manually, errors occur, and downtime is usually the result.
Cost per Year
Fortune 500 Companies: If you calculate a hour and a half of downtime per week and multiply it the average wage per hour, including benefits, the total cost of this downtime for companies is close to $46 million a year.
Cost per Hour
US Businesses: When surveyed, businesses indicated an average of 14 hours of IT downtime each year. Just over 35% believed their company lost $25,000 per hour in revenue, while 10% felt they lost $150,000 or more per hour.
Cost per Minute
Data Centers: The average cost for an unplanned outage is $5,000 per minute. However, some may lose as much as $11,000 per minute.
Money isn’t the only thing you lose with downtime. When customers can’t access your site, complete orders, or reach you over the phone, they turn to competitors. This causes a loss in revenue, but also a loss in reputation. The more you can limit downtime, the more you can encourage customer loyalty.
If you really want to know the cost of downtime for your business, use this equation:
Lost Revenue = (growth rate/total yearly business hours) x percentage impact x number of outage hours