{"id":119239,"date":"2024-12-16T14:39:43","date_gmt":"2024-12-16T19:39:43","guid":{"rendered":"https:\/\/jumpcloud.com\/?p=119239"},"modified":"2024-12-20T14:40:58","modified_gmt":"2024-12-20T19:40:58","slug":"it-outages-cost-downtime","status":"publish","type":"post","link":"https:\/\/jumpcloud.com\/blog\/it-outages-cost-downtime","title":{"rendered":"IT Outages & Measuring the Cost of Downtime"},"content":{"rendered":"\n

IT downtime is getting worse. One in five organizations experienced at least one severe IT outage between 2019 and 2022. 60% of IT outages in 2022 cost over $100,000, and 15% cost over $1 million<\/a>. These numbers are sharp increases from rates in 2019.\u00a0<\/p>\n\n\n\n

It\u2019s clear that downtime is becoming much more common and the costs associated with it are skyrocketing.<\/p>\n\n\n\n

Downtime refers to when IT systems are offline, unable to communicate, or otherwise unable to function as intended. Planned downtime involves taking systems offline to perform routine maintenance, upgrade systems and hardware, and other scenarios where interrupting service is needed. Unplanned downtime is when systems unexpectedly stop working. It\u2019s more of a wildcard \u2014 harder to predict and often expensive to deal with.<\/p>\n\n\n\n

This guide will cover measuring the cost of IT downtime, highlight some impacts and common causes, and discuss strategies to mitigate costs to keep your company from grinding to a halt.<\/p>\n\n\n\n

Measuring the Cost of IT Downtime<\/h2>\n\n\n\n

If company decision-makers don\u2019t know how important that expensive software upgrade is when compared to something with a more obvious benefit, they may shift funding elsewhere. Measuring IT downtime cost is a powerful way to show how important it is to fund IT.<\/p>\n\n\n\n

The first step for measuring IT downtime cost is determining what metrics would be most helpful to communicate the cost of downtime. Once you have an idea what numbers you\u2019re looking for, you can make those numbers as accurate as possible by combining data from your company with estimates and figures from other similarly sized companies in your industry. <\/p>\n\n\n\n

Calculating Downtime Costs<\/h3>\n\n\n\n

For a quick back-of-the-envelope calculation, you can use an estimated downtime cost-per-minute multiplied by the number of minutes a downtime event is expected to last. <\/p>\n\n\n\n

For a more accurate estimate, you may want to calculate total cost of ownership (TCO) and a few key performance indicators (KPIs). <\/p>\n\n\n\n

Key performance indicators measure how a company is performing. For IT downtime, good KPIs to track<\/a> include server downtime, Mean Time Between Failure (MTBF), and ROI.\u00a0<\/p>\n\n\n\n

Cost Variances by Industry<\/h3>\n\n\n\n

Downtime costs vary from industry to industry. When you\u2019re comparing how your organization is performing, you\u2019ll want to look for statistics that match your industry to get an accurate picture of how well your business is doing.<\/p>\n\n\n\n

High-risk industries include banking, finance, government, healthcare, manufacturing, and media. These industries are more likely to experience high costs from IT outages, often in millions of dollars. Using data from a low-risk industry if you\u2019re in a high risk one can set you up for failure by providing estimates orders of magnitude too small.<\/p>\n\n\n\n

Another thing to keep in mind when comparing companies is the business size. The larger the company, the more each minute of an outage could cost \u2014 and the more critical it is to plan ahead.<\/p>\n\n\n\n

Calculating TCO for IT<\/a> measures a tool\u2019s overall costs including the expense of using, maintaining it, and what happens when outages may occur. It can help evaluate if it might be time for a change, or if you\u2019re getting the right value from an impending investment. It can seem overwhelming if you don\u2019t know what costs to include, so we\u2019ve put together The IT Professional\u2019s Complete Guide to Calculating TCO<\/a> to help.<\/p>\n\n\n\n

Downtime Frequency and Statistics<\/h3>\n\n\n\n

The number of incidents, length of downtime, and financial impact of IT outages have all sharply increased over the last three years. According to Uptime Institute\u2019s 2022 Outage Analysis<\/a>:<\/p>\n\n\n\n