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The Cost of Downtime in Business

Apr 29, 2022

By: Ari Santiago

Blog Author

Ari Santiago is the CEO of CompassMSP.


Everybody wants to reduce expenses for their business. Lowering costs means having money available for employees, acquisitions, or new equipment, or increasing profits for shareholders.

Once upon a time, downtime was seen as a temporary power outage. Unfortunately, downtime has adopted a new meaning with the current digital ecosystem.

Downtime is costly for all businesses, but it can deliver a particularly noticeable blow to small and mid-sized businesses. And the costs of downtime continue to rise.

How much does downtime cost a business?

Information Technology Intelligence Consulting (ITIC) does a study each year about business & downtime called ITIC Global Server Hardware, Server OS Reliability Survey.

The 2021 survey polled 1,200 corporations across 28 different industries on the most popular server platforms’ reliability, performance, and security. These platforms include IBM Power Servers, Lenovo ThinkSystem, and Huawei KunLun and Fusion Servers.

Based on the survey, ITIC found that the cost for a single hour of server downtime totals $300,000 or more for 91% of the interviewed corporations.

And among that 91%, 44% of corporations experienced more than 1 hour of downtime.


Downtime is not just a network problem, though. One of the most significant financial losses is employee idleness – when employees are spending company time doing something other than work.

Do you know just how much downtime is costing your business?

Calculating the cost of employee downtime:

There is a formula for just about everything, so of course, there is a formula for calculating employee downtime, too.

The following percentage is known as the utilization percentage:

Lost productivity = employee salary/hour x utilization % x number of employees (with the same utilization %).

This percentage can help you determine how much lost employee productivity affects your bottom line.

In addition to salary, you are still paying expenses for benefits, office equipment, and office space related to your employees.

Because of the huge cost of employee downtime, some companies consider giving consequences when employees are the ones who unwittingly cause downtime whether by negligence or accident.

Downtime is more than dollar bills.

While downtime can have direct monetary costs, like paying for unforeseen technology services, downtime can also be costly in other ways.

Productivity Disruption

If your organization suffers from a downtime event, the first thing to suffer is workplace productivity. When employees can’t access their files and applications, they can’t do their jobs.

It can take hours or sometimes even days to get back to normal. And if you cannot retrieve lost data, that can be a major blow to your business.

Reputation Damage

News travels fast and downtime can kill a company’s reputation, especially when it’s due to a cybersecurity incident. If your company can’t perform its normal operations, your reputation is on the line. Once word spreads in your community, you may struggle to find new clients.

Loss of Customer Loyalty

After a downtime event, customer loyalty often drops. Your customers may feel like they can’t trust your business anymore. As a result, they may take their business elsewhere.

How can you avoid downtime?

Backup and Disaster Recovery (BDR) solutions are the only true answer.

You must do everything you can to protect your systems and data from being compromised, but no system is infallible. That’s why you must be prepared for the inevitable. You will have downtime, but you must be able to recover quickly and smoothly to keep your business running, your customers happy, and your reputation secure.

That’s why we encourage all SMBs to invest in strong, stable and well-tested backup & disaster recovery (BDR) solutions.

Every BDR solution is a little bit different.

When it comes to minimizing downtime and recovering quickly when it happens, it takes a solid strategic plan and the hardware and processes to handle it.

What CompassMSP offers:

CompassMSP’s solution delivers enterprise-grade data backup, recovery, and business continuity for local, virtual, and Cloud environments.

We install our BDR device to your network, then configure it to provide a bullet-proof backup and disaster recovery profile that backs up and protects all your critical business data. It backs up and protects data locally, then replicates that data to an offsite cloud location for maximum data security.

Our BDR Solution provides full independent system backups. It restores rapid individual file recovery and the ability to quickly boot separate backups as virtual machines in the event of hardware failure.

What does that all mean? Well, it means our BDR solution will keep your business on its feet when disaster strikes.

Get Started Today.

Our Autopilot program clients receive our Backup & Disaster Recovery services as part of the Autopilot offering.

If you’re not an Autopilot customer already, what are you waiting for? Your business deserves better IT, and the first step towards it couldn’t be easier. It all starts with a conversation.

Please fill out the form below to learn more about our Autopilot program. We’ll be happy to get you on track.

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