Website downtime isn't just an inconvenience – it's a profit killer that can devastate businesses of any size. Recent research shows that the average cost of downtime is $5,600 per minute, according to a 2014 study by Gartner, but this figure has risen significantly, with a more recent report (from Ponemon Institute in 2016) raises Gartner's average from $5,600 per minute to nearly $9,000 per minute.
For UK businesses, these costs translate to approximately £350 to £7,400 per minute, making downtime calculation essential for proper risk assessment and business planning.
Calculating downtime costs helps businesses make informed decisions about infrastructure investments, monitoring solutions, and disaster recovery planning. Calculating the true cost of downtime is important for your business because it helps you understand the risks and prepare accordingly.
Many businesses underestimate the true impact of outages, focusing only on immediate revenue loss whilst ignoring productivity costs, reputational damage, and recovery expenses. A comprehensive calculation reveals the complete financial picture.
The fundamental formula for calculating downtime costs is straightforward:
Basic Formula: Downtime Cost = Minutes of Downtime × Cost per Minute
For small business, use $427 as cost-per-minute. For medium and large, use $9,000, which translates to approximately £350 and £7,400 respectively for UK businesses.
However, this simplified approach only scratches the surface. A more comprehensive calculation requires breaking down multiple cost components.
The most obvious cost is immediate revenue loss during the outage period.
Revenue Loss Formula: Lost Revenue = (Annual Revenue ÷ 8760 hours) × Downtime Hours
For hourly calculations: (Average Hourly Revenue / 60) x Minutes of Downtime
Example: A UK e-commerce site generating £1.2 million annually faces 30 minutes of downtime:
When systems are down, employees remain idle but still require payment.
Productivity Loss Formula: Productivity loss = (Number of affected users) x (percentage of productivity impacted) x (salary per hour) x (length of the downtime)
Alternative Formulas:
Example: 15 employees earning an average £25/hour, 100% productivity impact for 2 hours:
Different business models face varying downtime costs based on their digital dependency.
E-commerce businesses face the highest immediate impact as An eCommerce site with no physical sales locations obviously has more to lose from a web outage than a business with physical sales locations.
E-commerce Formula: Downtime Cost = (Daily Revenue ÷ 1440 minutes) × Downtime Minutes
Amazon loses approximately $220,000 per minute of downtime, whilst losing just one customer can set a SaaS company back by approximately $650 in an hour.
SaaS businesses face unique challenges with subscription-based models and customer retention concerns.
SaaS Impact Calculation:
In the manufacturing industry, the cost of downtime is approximately $260,000 per hour. Manufacturers experience approximately 800 hours of downtime every year, representing roughly £213,000 per hour for UK manufacturers.
Manufacturing Formula: Production Loss = (Units per Hour × Profit per Unit) × Downtime Hours
Service-based businesses primarily face productivity and client relationship costs.
Services Calculation:
Remediation Costs: This involves the costs associated with rectifying the cause of the downtime, whether that's repairing hardware, hiring external consultants, or purchasing new software.
Recovery Cost Components:
While difficult to quantify, reputation damage represents significant long-term costs. An Akamai study found that nine percent of a site's visitors never return to a website they find down.
Customer Impact Formula: Lost Customer Value = (Visitor Count × 9% Abandonment Rate) × Average Customer Lifetime Value
Many businesses face contractual penalties for downtime events.
SLA Cost Calculation: Penalty = Contract Value × Penalty Percentage × Downtime Duration (if applicable)
Total Downtime Cost = Direct Revenue Loss + Productivity Loss + Recovery Costs + Customer Impact + SLA Penalties + Opportunity Costs
Based on global research adapted for UK market conditions:
Small Businesses (< 50 employees): £350-450 per minute
Medium Businesses (50-500 employees): £1,500-3,500 per minute
Large Enterprises (500+ employees): £5,000-15,000 per minute
The industries with the highest risk include banking/finance, government, healthcare, manufacturing, media and communications, retail, and transportation/utilities. One 2016 study found that the average cost for downtime in these industries was upward of $5 million per hour.
Understanding costs enables better investment decisions in:
The investment in prevention typically pays for itself by avoiding a single significant outage.
Downtime costs extend far beyond immediate revenue loss, encompassing productivity, recovery, reputation, and opportunity costs. UK businesses should calculate their specific downtime costs using the formulas provided, considering their industry, size, and digital dependency.
Regular monitoring and proactive measures represent wise investments when measured against potential downtime costs. For most UK businesses, even basic monitoring services cost less than 2-3 minutes of calculated downtime, making them essential business protection.
Want to avoid these hefty downtime costs altogether? Metrics+ offers reliable website monitoring that catches issues before they hit your revenue. Whether you're a freelancer managing a few sites on our Essential plan or running an agency with dozens of clients on our Agency Pro plan, we've got you covered with real-time alerts and comprehensive uptime tracking.