← ProStation Systems

How to Calculate the Cost of Server Downtime: A Simple Formula

The cost of a server outage is easy to work out yourself: downtime cost = (lost revenue per hour + idle staff cost per hour) × hours down + recovery cost. The hours it takes to fix the problem — MTTR, mean time to repair — is the number you can most influence, through backups, spares, support contracts and warranty. Here is how to work out your own figure without relying on generic industry averages.

Why to avoid generic “average downtime” figures

Most published averages come from large enterprises in other markets and rarely say whose revenue or team size they describe. Your own revenue, payroll and past incidents give a far more useful number.

The three parts of downtime cost

PartWhat it coversHow to estimate
Lost revenueSales or billable work that cannot happen while the system is downAverage revenue per working hour, for systems tied to sales
Idle staff costPeople who cannot work because the system is unavailablePeople blocked × their fully-loaded hourly cost
Recovery costIT time, replacement parts, emergency callouts, overtimeCost of your last few incidents or a vendor’s quoted rate

An internal file server may have no direct revenue loss, but almost every server has at least one of these costs.

A worked example (hypothetical — use your own numbers)

This is an illustration of the arithmetic, not data about a real business. A 12-person design studio’s file server goes down for 6 working hours. Eight people are blocked, each costing about ₹500 an hour fully loaded, so idle cost is ₹4,000 an hour. No revenue is tied directly to the server. Recovery costs a flat ₹5,000 callout.

Total = (₹4,000 × 6 hours) + ₹5,000 = ₹29,000 for one incident. If a better support arrangement cut the same incident to 2 hours, the total would be (₹4,000 × 2) + ₹5,000 = ₹13,000.

Reducing the hours: where MTTR comes from

Once you know the hourly figure, the value of anything that shortens repairs becomes measurable. Levers include spare parts on hand, redundant components such as remote management for diagnosis without a site visit, RAID to survive a disk failure, and a warranty or support plan with a fast response. A warranty does not stop failures, but it controls how quickly they are resolved. For the wider ownership picture see total cost of ownership, and for what to ask a builder see warranty and RMA on a custom build.

Turn the number into a decision

ProStation Systems’ warranty plans come in Standard, Extended and Premium tiers, and our longer server downtime cost guide maps each tier to repair time. Small teams can start with the small-business server page, then use the configurator or free consulting to size a build.

FAQ