by Scott Jack
Content Contributor, E-N Computers
15+ years experience in IT systems administration, endpoint management, and documentation.
Updated October 19, 2026
What is the real cost of IT downtime? News reports about large multinational corporations cite downtime costs in the hundreds of thousands of dollars per hour. Small businesses lose less per hour, but the loss can hurt them more.
Knowing your cost of downtime helps you judge your risk and decide how much to spend on IT support and preventive maintenance. Poor security, aging hardware, outdated software, and unreliable backups can all cause downtime. Yet Information Technology Intelligence Consulting (ITIC) reports that only about 1 in 5 organizations can accurately assess their hourly downtime cost.
Downtime is a real risk for small businesses.
- Ransomware was involved in 88% of breaches at small and mid-sized businesses in Verizon’s 2025 analysis, compared with 39% at large organizations. (Verizon 2025 Data Breach Investigations Report SMB Snapshot (PDF))
- Ransomware overwhelmingly targets smaller organizations: 96% of all ransomware victims with known company sizes in Verizon’s 2026 report were small and medium-sized businesses. (Verizon 2026 Data Breach Investigations Report)
- Security attacks and human error are the top two causes of downtime, followed by software flaws and bugs. (ITIC 2024 Hourly Cost of Downtime Report)
- 40% of small and mid-sized businesses say a cyberattack costing $100,000 or less could put them out of business. (VikingCloud 2026 SMB Threat Landscape Report)
- 73% of small and mid-sized businesses reported Wi-Fi or network disruptions in the past 12 months, and 58% reported website downtime. (VikingCloud 2026 SMB Threat Landscape Report)
Below, we share recent estimates of the cost of downtime for small businesses. We also provide an IT downtime cost calculator so you can come up with a number that accurately reflects your business.
We also cover common causes of downtime and steps you can take today to avoid or recover from costly outages such as lost network connectivity or ransomware.
To calculate your hourly downtime costs, you need to know your average hourly revenue and average employee compensation.
For a company with 20 employees doing $5 million in annual revenue, downtime can cost $3,146 per hour or $25,166 per day. This assumes a 40-hour week and a 75% drop in employee productivity. That doesn’t include recovery costs, overtime, consulting fees, data loss or intangible costs such as reputation damage. For comparison, fully managed IT for 20 users plus a monthly support block runs $3,300 per month at the rates on our pricing page: $125 per user plus an $800 block.
QUICK ANSWER:
What is the cost of IT downtime?
For a small business with 20 employees and $5 million in annual revenue, one hour of IT downtime costs about $3,146, or about $25,166 over an eight-hour day. That counts lost sales and lost work time only. Recovery costs, overtime, consulting fees, lost data, and damage to your reputation come on top. Larger companies lose far more: in ITIC’s 2024 survey, over 90% of mid-size and large enterprises put an hour of downtime above $300,000.
Table of Contents
- How much does IT downtime cost by company size?
- How much does IT downtime cost, according to industry research?
- What causes unplanned IT downtime?
- How do you calculate downtime costs?
- How much downtime does each uptime percentage allow?
- Downtime cost calculator
- How can you reduce the risk of downtime?
- Frequently asked questions about the cost of IT downtime
What does downtime cost by company size?
The table shows three examples of what one hour and one eight-hour day of downtime cost a company based on employee count and annual revenue, using the same 75% drop in productivity mentioned earlier. The calculation section below shows the math. To play around with the numbers, try our Downtime Cost Calculator.
| Employees | Annual revenue | Cost per hour | Cost per eight-hour day |
| 10 | $2 million | $1,332 | $10,660 |
| 20 | $5 million | $3,146 | $25,166 |
| 50 | $10 million | $6,662 | $53,300 |
Assumes a 40-hour week, average employee compensation of $46.89 per hour (Bureau of Labor Statistics, June 2026), and a 75% drop in productivity. Excludes recovery costs, overtime, consulting fees, lost data, and reputation damage.
How much does IT downtime cost, according to industry research?
Splunk and Oxford Economics’ 2026 research found that the average cost of downtime for Global 2000 companies has reached $15,000 per minute. Their combined downtime costs have risen 50% in two years to $600 billion a year. In 2024, ITIC surveyed more than 1,000 firms worldwide. About 41% of enterprises put the cost at $1 million to over $5 million per hour. ITIC notes that these are respondents’ estimates and leave out litigation, fines, and penalties.
Smaller companies report lower costs. With few exceptions, ITIC says micro SMBs (1 to 20 employees) don’t see hourly downtime costs in the hundreds of thousands or millions of dollars. Even so, a small business that puts an hour of downtime at $10,000 may lose $167 for every minute a single server is down.
A 2025 survey by Calyptix and ITIC of Calyptix partners and customers, most of them very small businesses, found that 37% put the cost of one hour of security-related downtime between $1,000 and $5,000, and 8% put it above $25,000.
| Research | What it found | What it means for a small business |
| Splunk and Oxford Economics, 2026 | Average downtime cost of $15,000 per minute for Global 2000 companies, and $600 billion a year in total. | These are the numbers you see in headlines, but they don’t reflect your costs. They can make you think you don’t have to worry. |
| ITIC, 2024 | Over 90% of mid-size and large enterprises put an hour of downtime above $300,000. | Companies with 1 to 20 employees typically don’t reach hundreds of thousands of dollars per hour. |
| Calyptix and ITIC, 2025 | 37% of small and mid-sized organizations (1–200) put one hour of downtime at $1,000 to $5,000. 8% put it above $25,000. | Small businesses often run on thinner margins, so even a lower cost of downtime can threaten the business. |
| Uptime Institute, 2026 | 57% of respondents put their most recent major outage above $100,000, and 1 in 5 put it above $1 million. | Outage costs continue to trend upward. Uptime’s respondents are data center operators. |
| Sophos, 2026 | Average recovery cost of $1.7 million after a ransomware attack, across organizations with 100 to 5,000 employees. | Applies to mid-size companies, not micro businesses. |
What causes unplanned IT downtime?
Unplanned downtime happens when critical systems become unavailable unexpectedly. Causes include server failure, network outages at your internet service provider or inside your local network, human error, and ransomware attacks.
Ransomware is a type of malware that encrypts, or locks, your files so that they become unusable. The attacker then demands payment in exchange for decrypting, or unlocking, the files and may threaten to distribute these publicly or to competitors if payment is not made. Many small businesses assume they’re too obscure to attract a ransomware attack. Recent reports show how common attacks are and what they cost:
- Across organizations of all sizes, Veeam’s 2025 report found that 69% of the 1,300 organizations it surveyed had at least one ransomware attack that encrypted or stole data in the past 12 months.
- Coalition’s 2026 Cyber Claims Report found that ransomware was the costliest claim type in 2025, with an average loss of $269,000, and that initial ransom demands rose 47%. A record 86% of businesses refused to pay.
- Sophos’s 2026 survey of 2,158 organizations with 100 to 5,000 employees put the average recovery cost at $1.7 million. In the U.S. edition, 53% of ransomware victims recovered fully within a week, and 24% took one to six months.
Human error created a major outage for nearly 40% of organizations over three years in Uptime’s 2025 Annual Outage Analysis Report. Of those, 85% came from failing to follow procedures or from flaws in the procedures themselves. Uptime’s 2026 report says failing to follow established procedures remains the leading driver of human-error outages. Possible causes of these errors include understaffing, too little user training, and too little operational and IT support.
Server failures occur when hardware components fail or software is corrupted. A power surge can destroy hardware, shorten its lifespan, or corrupt software, especially during a software update. Servers store files, host business application databases, and authenticate users. When one fails, a business can lose data, lose access to applications, and find that staff can’t log in to their workstations. Servers are also susceptible to malware attacks, just like workstations.
Network and power issues cause many of the outages Uptime tracks. Power is the leading cause of impactful outages, and IT and networking issues made up 23% of them in 2024. Uptime’s 2026 report adds that outages tied to fiber and connectivity are rising and more likely to cause extended disruptions. Network outages typically happen when an internet service provider has problems with its equipment or when underground lines are cut. Misconfigured or faulty equipment on your internal network can also cause them. Losing internet access can significantly hurt productivity at offices that rely on online services. Internal network problems are also hard to troubleshoot without the necessary training.
How do you calculate downtime costs?
Downtime costs have four components: lost revenue, lost productivity, recovery costs, and reputation costs. Our example is a fictional company with $10 million in annual revenue and 50 employees that has an unplanned outage lasting one day.
First, let’s calculate lost revenue. A company with $10 million in annual revenue earns an average of $192,308 a week, or $4,808 per hour of a 40-hour week.
- $10M annual revenue / 52 weeks = $192,308 average weekly revenue
- $192,308 / 40 hours per week = $4,808 average hourly revenue
Next, we’ll determine lost productivity. In June 2026, the Bureau of Labor Statistics reported that private industry average employee compensation, including wages and benefits, was $49.46 per hour. If the company’s employees lose 75% of their productivity during the outage, each hour of downtime costs $1,758 in lost productivity.
- 50 employees * $49.46/hour total compensation * .75 lost productivity = $2,473 lost productivity per hour
Added together, the two figures show that the fictional company lost $58,248 in revenue and productivity during the one-day outage.
($4,808 + $2,473) * 8 hours = $58,248 lost productivity and revenue in one day
Depending on the cause of the outage, the company may have incurred recovery costs such as new hardware, overtime for its sole IT generalist, or consulting fees. The outage may also have hurt its reputation with clients.
Downtime costs will likely spread across your business. Outdated or inefficient technology can raise labor, marketing, operating, and capital expenses. It can also lengthen payment cycles and add overdue invoices and write-offs. Your true cost of downtime depends on your own business.
How much downtime does each uptime percentage allow?
Uptime is expressed as a percentage of your system’s 24/7/365 availability.
- 99% uptime is nearly 4 days of downtime annually.
- 99.5% uptime is about 44 hours of downtime annually.
- 99.9% uptime is about 9 hours of downtime annually.
- 99.99% uptime is less than 1 hour of downtime annually.
We suggest that small businesses aim for 99.5% to 99.9% uptime on critical systems, which gives you the best balance between the cost of downtime and IT investment.
Achieving 99.99% uptime or greater takes significant IT investment: redundant servers, network equipment, power, and internet service. Backup solutions also need to be built for faster recovery. A business likely needs more than $10 million in revenue and downtime costs above $30,000 per day before it’s worth considering this level of investment.
A thorough cost-benefit analysis can help you determine your risk tolerance and what level of IT investment is practical for your business. The downtime cost calculator below can get you started.
Downtime cost calculator
How much will an IT outage cost your company? Use this calculator to find an exact figure for your business. Then compare it to the monthly cost of managed IT services.
How can you reduce the risk of downtime?
Knowing the causes and consequences of unexpected downtime is the first step. Reducing these risks takes time and energy you could spend on your business. A plan on paper doesn’t mean the plan works. Veeam’s 2025 Ransomware Trends and Proactive Strategies report, which surveyed 1,300 organizations, found:
- 98% of organizations had a ransomware playbook. Only 44% had backup verifications and frequencies written into it.
- Only 30% had a pre-defined chain of command for an attack.
- Of the organizations that were attacked, only 10% recovered more than 90% of their data, and 57% recovered less than half.
A managed IT services provider (MSP) can give you the skills, experience, and support to reduce your downtime risk. Whether you need full IT services or support for your on-staff IT professional, an MSP can help in four ways.
Consultation between key decision makers in your business and a Fractional Chief Technology Officer, account manager, and technical account manager from the MSP means your technology meets your daily needs and supports the long-term vision for your company. Developing a strategy together lets you plan ahead instead of reacting to IT failures. Regular communication between you and the MSP gives the right people the information they need to make decisions for your company.
Security assessments and training improve your ability to defend against cyber threats. For example, a penetration test, which simulates an attack on your systems, may find holes in your outer defenses that attackers can use to reach confidential information and control critical systems. Training helps your team recognize dangerous websites and emails and protect themselves.
Network management includes an initial network assessment, maintenance, and monitoring to maintain the speed and performance of your network. As an early line of defense, the MSP configures your firewall to expose as little of your network to attackers as possible. Network technicians continually monitor speed and performance and fix network issues before they slow you down.
Cloud service implementations can also reduce your exposure to unplanned downtime. Online services are designed to be always available, which is costly to achieve with on-site systems. An MSP like E-N Computers can also help you develop an IT disaster recovery plan as part of your business continuity plan, to manage business disruption after an outage or disaster. The plan prioritizes recovering IT resources that support time-sensitive business functions. It covers the parts of a system you need to recover: hardware, software, connectivity, and data.
Next steps: Work with us on an IT strategy
E-N Computers is a managed IT services provider based in Waynesboro, Virginia, with offices in Harrisonburg, Richmond, and Washington, DC. For 30 years, we’ve supported small and mid-sized businesses, including law firms, healthcare practices, financial firms, and defense contractors. We aim to fix problems before they cost you a day of work, and we explain what we’re doing in plain language. If we’re not the right fit for your business, we’ll tell you.
If the number from the calculator in this article is different than you expected, we can go through it with you. Tell us how many people you have and which systems you can’t work without, and we’ll show you what it would take to lower your downtime risk. The consultation is free. You can compare your estimated downtime cost to the cost of managed IT services using our Pricing Calculator. When you’re ready, schedule your free consultation.
