How Much Does One Hour of Downtime Cost Your Business?

Most companies cannot say what an hour of downtime costs them until it happens. That makes it hard to decide how much to spend on backup, recovery and resilience. A rough estimate is enough to start the conversation, and it is usually higher than people expect.

A simple formula

Cost per hour = lost revenue + wasted labour + recovery costs + other losses.

• Lost revenue per hour. Annual revenue divided by working hours, adjusted for how much of your revenue depends on the affected systems.
• Wasted labour. Number of idle staff multiplied by their hourly cost, including the time spent catching up later.
• Recovery costs. External specialists, overtime, replacement hardware and data restoration.

Costs people forget

• Contract penalties and service-level credits.
• Customers who leave or order less afterwards.
• Regulatory reporting and, after a data incident, legal fees.
• Reputation: partners and customers remember outages.
• The cost of getting back to normal, which can last days after systems are back.

Two numbers that drive the cost

RTO (recovery time objective) is how long you can be down. RPO (recovery point objective) is how much data you can afford to lose. A business that cannot lose more than 15 minutes of data needs a very different design from one that can accept a day.

How to reduce the cost

1. Set RTO and RPO per system, based on the cost per hour you calculated.
2. Use the 3-2-1 rule. Three copies of your data, on two types of storage, with one offsite or immutable.
3. Test restores. A backup that has never been restored is a hope, not a plan.
4. Have a recovery runbook that someone other than your IT lead can follow.
5. Watch for early signs. Monitoring catches a failing disk or a spreading infection before they become an outage.

Try it yourself

Use our downtime cost calculator to get a first estimate for your company. Then see how our backup and disaster recovery service turns that number into recovery targets you can rely on, or book a meeting to go through it together.