IT Downtime Cost Calculator
Put a number on what an outage really costs in lost productivity, lost revenue and recovery effort, and see what each availability target is worth a year.
- Board-ready figures
- Major incident impact
- Availability business case
A two-hour outage of a regional retail system costs about AED 72,200, assuming 400 staff lose 60% of their work at AED 90 an hour, AED 25,000 of sales an hour of which 40% never comes back, and six responders at AED 150 an hour plus eight hours of follow-up. At AED 32,500 an hour, raising availability from 99.9% to 99.95% avoids about AED 142,350 a year.
Describe the outage
Use your own figures, or keep the example of a regional retail system. Everything updates as you type.
People
Revenue
Response and penalties
Making the number credible
- Agree the inputs with Finance first. A downtime figure built with Finance's own revenue and salary numbers survives the budget meeting. One built by IT alone gets challenged.
- Be conservative about revenue. Only count what's truly lost. An overstated figure damages trust in every number that follows.
- Price your real outages. Run last year's major incidents through the calculator. Real events are more persuasive than a hypothetical, and pair well with the SLA calculator.
- Show the cost of time. The duration chart makes the case for faster detection, clearer escalation and rehearsed major incident management.
- Use it both ways. The same maths can show that a service doesn't need four nines, which saves money that's better spent elsewhere.
Method & ownership
Outage cost adds lost productivity (affected users × share of work lost × loaded hourly rate), revenue that isn't recovered later, responder time for the outage plus follow-up hours, and one-off fixed costs. Yearly exposure for each availability target is the hourly cost × the downtime that target allows in a 24 × 7 year.
The formulas used here are standard, published methods. The implementation, interface, wording, findings logic and benchmark figures are original work by ITSM Compass. Results are estimates, not professional advice. See the terms of use.
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Questions
How do you calculate the cost of IT downtime?
Add up four things for the length of the outage: lost productivity (affected users × share of work lost × loaded hourly cost), lost revenue that won't be recovered later, the cost of the people responding and following up, and any SLA penalties or other fixed costs.
What is a fully loaded hourly cost?
It's salary plus benefits, allowances, office and equipment costs, divided by working hours a year. A common shortcut is annual salary × 1.3 to 1.5 ÷ 1,800 hours.
Why not count all revenue lost during the outage?
Some customers come back later. A shopper who can't pay at 14:00 may buy at 15:00, while one who walks out to a competitor is lost. The unrecovered percentage is the share that never comes back, which is the honest number to put in front of a board.
How does this help justify resilience spending?
The yearly cost chart prices the downtime each availability target allows. If moving from 99.9% to 99.95% avoids more downtime cost a year than the extra resilience costs to run, the business case makes itself.
Need the business case in front of the board?
Executive governance workshops turn availability, risk and cost into decisions leaders can sign off.