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The Cost of Outages and IT Failures For Your Organization


Pie day wasn’t the headline for March 14th of this year. Instead, Facebook (also the parent company of Whatsapp and Instagram) experienced almost an entire 24 hour outage and millions of their users were unable to utilize their service. This cost them an estimated $90 million in lost revenue during the outage.

Although your company may not lose $90 million, an IT outage or failure can be extremely costly in several ways. The financial loss coupled with productivity and data loss will result in an outage that may cost millions of dollars for your business. Each of these losses can have financial and legal consequences in addition to hurting your business. Having a contingency plan in case of an outage can save thousands of dollars for your organization when an outage occurs.

Financial Cost:

The first and most obvious effect of an outage is the financial cost. The effect on your bottom line will vary with the size of your company. The average cost of an IT outage is $5,600 per minute; this equals up to $140,000 per hour on the low end and can cost as much as $540,000 per hour. This exponential rate of revenue loss will continue until the outage is fixed. It is apparent that for most organizations an IT outage for a day will result in millions in revenue lost; proactively preventing and outage and having a back-up plan will cost much less than fixing the outage.

Data Cost:

In addition to the blow to your organization’s bottom line, an IT failure or outage can result in data loss. Data loss isn’t as apparent immediately as the financial loss, but it is the more costly result out of the two. Data loss isn’t limited to just company data; client and customer data can also be lost in the process, which can lead to potential financial and legal ramifications. Data loss will also likely affect key enterprise applications and products for your company. This will result in additional fees to repair the applications and try to gather any lost client data.


Productivity Cost:

.Furthermore, there will be a productivity cost in addition to the lost revenue from clients. Businesses on average lose 14.1 hours of work annually due to IT outages. These lost hours can hurt your productivity in several ways:

  • Productive and present employees will be unable to work during the outage, but your organization is still required to pay them
  • The underutilized labor your employees will be extremely costly because employees aren’t generating more sales or improving important aspects of your business
  • Operations for your business will experience a halt (i.e. tech-powered warehouses)

These are just some of the complications of an IT outage.  For more information on how to manage an IT outage, talk to us today!

Last Updated: On May 22, 2019