The Cost of IT Downtime in 2025: What SMBs Need to Know

Downtime cost is the total financial impact when your systems, servers, or applications are unavailable.

A simple estimate most teams use:

Downtime cost = minutes of outage × cost per minute

Your cost per minute should include lost revenue, productivity loss, extra support and recovery effort, SLA penalties, and reputational impact. Once you know roughly how much you earn per hour and how many people or processes depend on the affected systems, you can turn an incident duration into a concrete number quickly.

Across industries, the average cost of downtime per hour routinely lands in the six-figure range. Recent surveys show that over 90% of mid-size and large enterprises say one hour of IT downtime costs more than $300,000, and 41% put it between $1 million and $5 million per hour.

SMBs may see smaller absolute numbers, but the impact on cash flow and growth is often worse. Losing $25,000–$100,000 in a single hour of shutdown can wipe out an entire month’s margin for a small team. In practice, the true cost is often best measured as a percentage of revenue and runway, not just raw dollars.

A classic benchmark often cited is about $5,600 per minute, or roughly $336,000 per hour.

More recent 2024–2025 studies show that number trending upward for data-intensive firms, with some large enterprises reporting $10,000–$14,000+ per minute when core platforms fail.

For smaller organizations, a conservative starting point is a few hundred to a few thousand dollars per minute. The safest approach is to calculate your own cost per minute using your revenue, staffing, and critical process data rather than relying only on global averages.

Server downtime or data center downtime compounds quickly because it often hits several applications at once.

If you run a SaaS product or digital platform, one failed storage array, virtualization host, or network switch can block thousands of users simultaneously. In practice, lost MRR, refund requests, SLA credits, and overtime for your ops team often show up on the same incident report.

Unplanned system outages are far more expensive than scheduled maintenance windows. During an unexpected outage, you’re paying for:

• 100% loss of online revenue for affected services
• Emergency engineering time and overtime
• Contractual penalties and SLA credits
• Customer churn and reputational damage

Planned maintenance can be scheduled at low-traffic hours, communicated in advance, and tightly time-boxed. You may see a temporary dip, but you avoid panic, support spikes, and most compliance risk.

Downtime costs vary sharply by sector. Recent benchmark ranges often cited include:

• Healthcare: ≈ $636,000 per hour
• Retail and e-commerce: ≈ $1.1 million per hour
• Media: ≈ $90,000 per hour
• Telecommunications: ≈ $2 million per hour
• Energy: ≈ $2.48 million per hour
• Automotive: ≈ $3 million per hour (about $50,000 per minute)
• Manufacturing average: ≈ $260,000 per hour, with 800+ downtime hours per year often cited
• IT and digital services: typically $145,000–$450,000+ per hour, depending on scale

These are useful reference points when you build your own business case for better monitoring, redundancy, and support.

For manufacturing in 2025, a single hour of unexpected downtime is often estimated between $50,000 and $260,000, with many plants reporting 800+ hours of unplanned downtime per year.

In automotive assembly, multiple sources commonly peg assembly line downtime at roughly $22,000–$50,000 per minute, or $2.3–$3 million per hour, once you factor in idled labor, missed delivery windows, and cascading supply-chain penalties.

For semiconductor fabs, public estimates often hover around $1 million per hour of lost production.

For online businesses and custom e-commerce platforms, website or application downtime usually means 100% loss of digital revenue for the duration of the outage.

For SMBs, a 30-minute outage during peak hours can translate into thousands or tens of thousands in lost orders, plus refunds or discounts to reduce churn. If the storefront is heavily customized and carries technical debt, recovery tends to take longer, so losses compound over time.

Network downtime shuts off everything that relies on connectivity: VPN, VoIP, collaboration tools, POS terminals, IoT devices, APIs, and cloud apps.

Beyond direct revenue loss, communication downtime has hidden financial costs: slower incident triage, misrouted customer support, and internal teams acting on outdated information. Major outages can also drive churn and long-term reputation damage.

Lost revenue is the obvious one, but these are usually the real multipliers:

• Idle payroll: staff who cannot do productive work while systems are down
• Overtime for recovery: engineers and support pulled into late-night or weekend work
• SLA and contractual penalties: credits, refunds, and legal exposure
• Operational backlog: delayed orders, filings, or internal projects
• Brand damage and churn: lower NPS and customers switching providers quietly

Even small uptime differences can change ROI dramatically:

• 99.0% uptime ≈ 3.65 days of downtime per year
• 99.9% uptime ≈ 8.76 hours per year
• 99.99% uptime ≈ 52 minutes per year

If your cost per minute is in the hundreds or thousands, moving from 99.0% to 99.9% (or better) can mean hundreds of thousands saved annually, often more than the cost of higher-tier infrastructure, redundancy, or DR.

Even in smaller environments, it is common to see multiple outages per month, with total annual downtime often in the tens of hours for critical systems.

A practical target for SMBs is to push core business systems toward 99.9%+ uptime and treat recurring monthly incidents as a signal that you need better monitoring, stronger support processes, or a change in hosting or architecture.

Pricing spans a wide range, but common budget patterns look like this:

• Entry-level DR for small environments: low four figures per month
• Mid-market fully managed DR across multiple apps and regions: low- to mid-five figures per month
• Large enterprises: six figures per year or more, especially with strict RTO/RPO and compliance

The key question is: what is your downtime cost per hour, and how much of that are you willing to risk. A DR plan that prevents even one serious outage a year often pays for itself several times over.

Cheap SMB hosting often comes with weaker uptime SLAs, shared infrastructure, and slower incident response. Even if you save a few hundred dollars a month, one or two major outages can erase those savings instantly.

Compare uptime, support model, and recovery guarantees next to monthly price. For customer-facing systems, it is usually more cost-effective to choose 99.9%+ SLAs, transparent incident processes, and active monitoring rather than chasing the lowest sticker price.

For SMBs, every serious incident is an unplanned tax on growth. Under-funded support, monitoring, and maintenance become a hidden liability.

Even modest improvements in uptime can unlock meaningful ROI, often in the first year. Investing in monitoring, predictable on-call processes, application support, and disaster recovery turns downtime from a vague risk into a managed cost with numbers you can actually show to finance leadership.