Managed IT

The Real Cost of System Downtime

The Real Cost of System Downtime

by Robert Bruce - May 27, 2014

Downtime, what a downer. Information technology has become an indispensable workplace necessity. When IT is working as planned and the bits and bytes are flowing we can whistle while we work. But when that dreaded email from the system administrator pops up warning that the system will be down for X amount of time, then our tune changes.

Downtime has become one of the banes of modern life, both at the office and on the road. A chief financial officer I spoke to recently told me she is “crippled” when her email is down. I know the feeling. And that is just one vital enterprise system. Telephones, printers, computers, calendars, the Internet—take away any of those for even a few minutes and we are handcuffed.

Read on to learn more, including:

  1. What exactly is downtime?
  2. What causes downtime?
  3. How much downtime is acceptable?
  4. And how much does downtime cost?

What exactly is downtime?   downtime

IT experts have several complex definitions of downtime, but for us lay people it boils down to system unavailability. If an application can’t be used, no matter the reason, then in my book, it is down. There are degrees, of course. The app may be unavailable just at my work station, or the whole office, or throughout the enterprise at multiple locations.

It is important to note that downtime need not result in data loss—if your systems are adequately backed up and if you have a disaster recovery plan

RELATED: Be Prepared Avoid Data Disasters with Backup and Disaster Recovery Planning

What causes downtime?

"The chain is only as strong as its weakest link" is not a cliché when it comes to IT. Lots of things can go wrong and shut down a system, but usually downtime falls into one of three categories: planned downtime, component failure, and human error.

Planned downtime is a fact of IT life. Hardware upgrades, software updates, new server and operating system installs, all are required eventually. Hopefully they are scheduled during off peak hours, if at all possible.

When any of these systems fail unexpectedly, then we are into component failure. That, of course can, and often does, happen during business hours. Mitigating these unplanned events is one of the main functions of an IT department or a managed services provider. This is where all that security management, data backup, server load balancing and a service level agreement (SLA) pay off.

Humans – that’s us. File deletion, unskilled operators, hackers, and just plain maliciousness, any one of these can shut down all or part of a system, either intentionally or not.

How much downtime is acceptable?

Ideally, we would have 100% uptime, but in the vast majority of enterprises that is just not possible. In IT, they call it the rule of nines, promising anywhere from 90% uptime to 99.999% uptime. This is based on a yearly calendar.

As you can see from the chart below, there is a huge spread between the lowest level and the highest. The 90% and 95% levels are there strictly for comparison. Very few enterprises could tolerate such low levels of availability. The standard is usually 99.9%. As you can see, that 0.9% is critical because it decreases downtime from over three and a half days per year to under nine hours.

 Level of availability 

 Downtime per year 


 36.5 days


 18.25 days


 3.65 days


 8.76 hours


 50 minutes


 5 minutes

How much does downtime cost?

There are many ways to calculate the cost of downtime. But, whether you are a large enterprise — such as Virgin Blue airline, which lost an estimated $20 million in September, 2010 when its online booking system went down — or if you are a small to medium business (SMB) that temporarily loses client contact, system downtime is costly.

Tangible downtime costs are easier to count and, of course, vary from business to business. The intangibles, however, are far harder to tally.

Because very little work, if any, can be done during a complete system shutdown, downtime costs may be computed simply as lost man-hours. But how can one put a monetary figure on lost faith, or quantify diminished customer satisfaction? If a law firm loses a case because a critical document was unavailable due to a software error, or a medical practice is disrupted for a day by a system failure, how can one ever know the true cost?

This is where that rule of nines really comes into play. An SLA that guarantees that extra 0.9% availability becomes very important to some enterprises. At 99.9% uptime guaranteed, your network can still be unavailable over 40 minutes per month. Just a little extra—99.99% drops downtime to about four minutes per month.

100% uptime is completely unrealistic, but 100% downtime is definitely preventable. Hopefully this gave you insight into the truth behind downtime: what it is, what causes it, and how much is accepectable. Now you can figure out exactly how much it's costing your company and seek out ways to save tons of money in preventable downtime costs.  

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