Follow Tweet This Facebook LinkedIn google+
Industry talking to customers What's this?

Find out how much an outage can cost your business

Published: March 8th, 2018 By: Glenn Weir


How would you feel about getting a 95 on an exam? You’d likely be pleased. You’d be on top of the world with your A-plus. But what if you were in a line of business where a 95 was considered an abysmal failure?

In some parts of the technology sector, a 95 is not an A-plus, it’s a disaster. It means you’re down four per cent of the time.

If you think four per cent is no big deal, think again. It works out to just over 350 hours of downtime per year. If we assume that a single hour of downtime due to infrastructure failure sets a company back $100,000, 350 and a half hours of downtime — a “mere” four per cent — would mean a loss of over $40 million. In other words: an abysmal failure.

Downtime generally falls into one of two categories:

  • Category 1: These are caused by those many mundane issues that crop up daily. These issues may seem minor at surface — and on their own they may in fact be minor — but over the course of a year, the pain adds up. Think “death by a thousand paper cuts.” These issues can range from the obvious — hard drive failures, faulty power supplies, et cetera — to the not-so-obvious — a sluggish computer or Internet connection or a cranky printer.
  • Category 2: This downtime is brought about by fires and floods as well as natural disasters like earthquakes, tornadoes, and hurricanes. These issues don’t happen nearly as often as Category I issues, but when they do, their impact typically ripples across an entire organization.

Putting aside the dollars and cents for a moment, there is another kind of loss organizations suffer when they’re down: the loss of general goodwill. When a company goes down, its reputation is bound to be affected. This is a “flesh-and-blood” factor as opposed to dollars-and-cents; that makes it much more difficult to calculate.

You might compare sales and social media engagement levels pre- and post-breakdown to get some idea of the damage that’s been done, but this method is far from precise. As an illustration, the full extent of the damage an airline sustains when a system failure sees thousands of its customers stranded in airports around the world can never be known. Social media might light up for a while, and a few news stories might rise to the surface, but this hardly qualifies as data.

Do you have a good fix on how much an outage would cost your business? While you might be able to ballpark it, TeraGo’s Cost of Downtime Calculator can help you measure the true business impact of an IT outage. To use the calculator, visit the TeraGo website.