The True Cost of Enterprise Downtime


Enterprise downtime costs continue to rise due to the dependence on IT infrastructure and the rise of digital transformation. According to 44% of firms, hourly downtime costs exceed anywhere between $1 million to over $5 million, consisting exclusively of legal fees, fines, or penalties.

In 2014, Gartner identified that the average downtime cost in IT is $5,600 per minute, which extrapolates to well over $300K per hour. In 2016, Ponemon Institute found in that this number increased to $9,000 per minute. Statista held a study in 2020 that supported these numbers.

Downtime costs can be harmful to big tech companies like Google and Facebook, but can also be a danger to small organizations. Any form of IT downtime can lead to a significant loss for your company.

In a study by CBInsights, it was found that after a post-mortem analysis on 100+ companies, 38% went under because they ran out of money. According to the National Archives and Records Administration, 93% of businesses that experience a data center failure go out of business within a year.

Understanding Downtime Costs

Downtime is defined as a period during which a machine is unavailable because of technical breakdown, a lack of maintenance, or other circumstances.

While IT downtime is slightly different, the message remains the same—malfunctions or technical difficulties. The difference is that it impacts various aspects of your business. Because the IT business is diverse, only the most basic calculation templates are applicable.

In the IT industry, the reasons for downtime differ from one organization to another. Frequently, the causes are distinctive per company. Natural catastrophes, hardware planned/unplanned failures, power outages, cyberattacks such as DDoS, human errors, and so on are a few reasons for downtime.

Whatever the cause may be, any downtime comes at a price.

Enterprise Risks of Downtime

In addition to monetary losses, the following are potential risks that companies may face due to downtime:

  1. Lost productivity 
  2. Lost, damaged, destroyed, altered, or stolen data 
  3. Damage to the organization’s reputation
  4. Potential for litigation by business partners, customers, and suppliers
  5. Regulatory compliance exposure 
  6. Possible civil and criminal liabilities and penalties 
  7. Potential bankruptcy

How to Prevent Downtime?

Downtime is expensive, so it is crucial to have strategies to prevent it from happening. Here are two essential ways you can prevent downtime.

1. Create a Business Continuity and Disaster Recovery Plan

Develop an emergency plan that includes a thorough understanding of your organization. In a crisis, a Business Continuity and Disaster Recovery Plan entails shifting resources, establishing command chains, and coordinating staff shifts. This is done to ensure or minimize data loss and work interruptions during a downtime event.

Every stakeholder must know exactly what to do in the event of a power outage, a calamity, or system downtime. They must know who to contact if their direct supervisor is unavailable and who they must report to if a problem arises. With a plan, you can quickly determine which departments or jobs can be done remotely or transferred in the event of downtime.

ecognize that downtime can take many forms, and having a disaster recovery plan in place is essential if you want to keep expenses down and avoid going out of business.

2. Execute a High Severity Incident Management Plan

Even if your company is prepared, recognize that downtime is unavoidable. Therefore, it is important to include it in your annual budget. Moreover, you should make sure that you learn from these occurrences to improve the way you respond to them.

A high severity event management plan is used to learn from downtime events. This plan includes the process of documenting, tracking, and assigning monetary value to issues that affect vital systems.

The main objective of this plan is to bring everyone on the same page quickly. Additionally, the plan incorporates the paradigm of analysis and information collecting. The most significant way to avoid a repeat disaster is to learn from it and take action to prevent it.

How to Save on Downtime?

Scale your modernization projects and work through sections to save your company a lot of downtimes. You can do this through Profound Logic’s Flexible IBM i Source Code Transformation.

Flexible Code Transformation is a solution that allows enterprises to transform legacy IBM i RPG source code to Node.js or truly modern RPG in an automated manner. With this service, you can go immediately into Node and bypass the long, expensive, and risky refactoring cycles that Java or.NET refactoring entails.

We also offer a service that transforms fixed RPG to Truly Modern RPG, including monolithic RPG modularization, removal of dead code, automatic Goto fix, and conversion to “Fully Free,” not simply free format.

Profound Logic is the only partner that offers a unified development environment for all its products. This covers not only legacy code but also future development.


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