IT downtime is more than just an inconvenience, it’s a costly, business-crippling event. When systems go offline, productivity stops, revenue plummets, and customer trust is shaken. According to Gartner, the average cost of IT downtime is a staggering ￡4,000 per minute, with larger organisations facing even higher losses, highlighting the need for resilient IT infrastructure and proactive maintenance to avoid these costly disruptions.
While the visible costs of IT downtime, lost productivity, customer dissatisfaction, reputational damage, and revenue loss are obvious, the hidden costs are just as impactful. Disrupted workflows and project delays can lead to lost productivity and can lead to a loss in revenue, while system unavailability frustrates customers, generates negative feedback, and causes potential customer loss, especially during peak times.
Prolonged outages can severely damage a company’s reputation as it can signal unreliability which can result in negative reviews, social media backlash and media coverage, with recovery often taking years. The financial toll is immediate, as businesses can miss sales opportunities and service-based businesses lose billable hours due to these operational setbacks.
A prime example is the global IT outage in July 2024, which significantly impacted CrowdStrike’s brand reputation. This disruption impacted 8.5 million Microsoft devices, including those in airports and healthcare systems, leading to significant operational delays. The outage highlighted the importance of rigorous testing and an effective Disaster Recovery Plan. Although CrowdStrike’s response included swift acknowledgement, quick fixes, and transparent communication, the event still damaged its reputation and stock value.
The hidden costs of IT downtime
While the most visible costs of IT downtime are obvious, there are several hidden costs that businesses often overlook.
- Employee morale: Employees rely on technology to do their jobs. When systems go down, it’s not just about a loss of productivity, it’s also about the frustration and stress caused by delays. Over time, frequent downtime can lead to a drop in morale, with employees feeling frustrated by being unable to complete tasks. This can affect overall job satisfaction and productivity.
- Data loss: Data is at the core of most businesses. A system failure could lead to lost or corrupted data, potentially causing irreversible damage to critical files, databases, or customer information. Depending on the severity of the failure, restoring data may require costly recovery processes, and in some cases, the data may be permanently lost. This loss can have serious consequences, especially in industries like finance or healthcare, where data integrity is essential.
- Compliance risks: Many industries are governed by strict compliance regulations regarding data storage, security, and reporting. When IT systems fail, there’s a risk of falling out of compliance. Failure to meet regulatory standards could result in fines or legal consequences.
- Maintenance costs: The longer systems remain down, the higher the cost of fixing them. IT downtime often requires additional IT resources, whether it’s overtime for in-house teams or the hiring of outside experts, to get systems back up and running. Additionally, recurring downtime may signal that systems are outdated or poor maintenance, leading to higher long-term maintenance costs.
The most common causes of downtime
IT downtime doesn’t happen randomly. There are common causes that most businesses face and understanding these risks can help you mitigate them.
- Cyber attacks: Cyber attacks such as ransomware, DDoS attacks, or malware are increasingly common and can take your IT systems offline for hours or even days. In addition to the direct damage of the attack itself, recovery costs, data breaches, and reputational damage can be severe. According to a 2023 Databarracks survey, 24% of UK businesses suffered downtime as a result of a cyber incident last year.
- Human error: Even with the rise of automation, human error continues to be a major contributor to IT downtime. Simple mistakes, such as misconfigured settings or incorrect software updates, can lead to serious disruptions. A prime example occurred in July 2024, when a coding error by CrowdStrike triggered a global IT outage.
- Hardware failure: Malfunctioning servers, storage devices, and other hardware components are a significant cause of downtime. Despite regular maintenance, hardware is subject to wear and tear, which eventually leads to degradation and failure over time.
- Software issues: Errors and system incompatibilities in software can also trigger unexpected downtime. These issues may arise from faulty updates, internal bugs, or system conflicts.
- Natural disasters: Natural disasters such as hurricanes, floods, earthquakes can disrupt power supply or even damage essential hardware, leading to significant operational interruptions.
How to calculate the cost of downtime?
The actual cost of IT downtime depends on the size of your business, your industry, and how long your systems are down. Here’s how to calculate it:
Productivity Cost:
This formula shows the cost of lost productivity during downtime:
Productivity Cost = E × % × C × H
- E = Number of employees affected
- % = Percentage of time they’re affected
- C = Average hourly wage of employees
- H = Number of downtime hours
Revenue Loss:
This formula calculates the loss in revenue due to downtime:
Revenue Loss = (GR ÷ TH) × % × H
- GR = Gross annual revenue
- TH = Total annual business hours
- % = Percentage impact of downtime
- H = Hours of downtime
These formulas give you an estimate of the costs related to lost productivity and revenue during downtime. Or, you can use a downtime cost calculator for a quicker estimate.
How to avoid IT downtime
Avoiding IT downtime is essential for ensuring business continuity and minimising disruptions. Here are a few strategies to help keep your systems up and running, which we will delve into during our upcoming webinar:
- Invest in reliable IT infrastructure: Choose high-quality, reliable hardware and software. Cutting costs on infrastructure can lead to costly outages and inefficiencies.
- Schedule regular maintenance: Perform routine maintenance to keep systems healthy. This includes ensuring that operating systems, antivirus software, and critical applications are updated with the latest security patches and bug fixes. Regular checks help catch potential issues before they become major problems.
- Establish strong data backup & recovery: Ensure you have a solid backup plan with both on-site and off-site solutions. This protects your data from cyberattacks, natural disasters, and other risks.
- Create a disaster recovery plan: Develop and regularly update a disaster recovery plan. This plan should detail the steps for quickly restoring systems and resuming business operations in the event of a major disruption.
- Train employees: Educate staff on IT best practices to reduce human errors, which is a common cause of downtime.
- Invest in the Cloud: Invest in cloud technologies that provide high availability, scalability, and reliable backup options, to keep your business running during hardware failures. However, not all cloud services come with automatic backups. To ensure data protection, consider solutions such as Datto SaaS to back up data within Microsoft 365.
- Invest in robust cyber security solutions: Implement strong cyber security measures like firewalls, endpoint detection and response (EDR), Managed SIEM, and regular system updates. Strong security measures can help prevent downtime caused by cyber threats, such as data breaches or ransomware attacks.
Join our webinar: How SMEs can get more from their IT in 2025?
Are you ready to take control of your IT? Join our upcoming free webinar to learn how to implement a cost-effective IT strategy that reduces downtime, prevents disruption, and ensures smooth business operations, all while staying within a controlled budget.
