How the calculation works
All figures are in US dollars, and outage hours mean hours that fall within your operating hours.
- Revenue per operating hour = annual revenue ÷ (operating hours per week × 365 ÷ 7), or the hourly figure if you enter one. A business open 40 hours a week has 2,085.7 operating hours a year; one open around the clock has 8,760.
- Revenue at risk per hour = revenue per hour × the share of revenue that stops when IT is down.
- Lost labor per hour = employees affected × loaded hourly cost × productivity lost. Loaded cost means pay plus benefits and payroll taxes.
- Cost per hour = revenue at risk + lost labor + other costs that run per outage hour (overtime, contractors, vendor time).
- Cost per incident = cost per hour × hours down + one-time costs per outage.
- Cost per year = cost per incident × outages per year. Downtime per year is also shown as a share of operating hours.
Defaults and limits. Revenue at risk and productivity lost start at 100%, the worst case; lower them to match how your business works. Revenue that customers make up after the outage, reputational damage, lost data and regulatory fines are not modeled: add the ones you can price as one-time costs. The calculator has no industry averages; every number is yours.
Worked example
A company with $20 million in annual revenue, open 50 hours a week, where 60% of revenue stops when its systems are down. An outage idles 80 employees at a loaded $55 an hour, and they lose 75% of their work. IT overtime and vendor time cost $250 an hour, and each outage leaves $5,000 of catch-up work. Outages last 4 hours, three times a year:
| Item | Per hour |
|---|---|
| Revenue per operating hour: $20,000,000 ÷ 2,607.14 h | $7,671.23 |
| Revenue at risk: 60% | $4,602.74 |
| Lost labor: 80 × $55 × 75% | $3,300.00 |
| Overtime and vendor time | $250.00 |
| Cost per hour of downtime | $8,152.74 |
- Per outage: $8,152.74 × 4 hours + $5,000 = $37,610.96
- Per year: $37,610.96 × 3 = $112,832.88
- 12 hours down a year is 0.46% of 2,607 operating hours
Using the result
The cost per hour sets how fast recovery has to be. Set it against your recovery time objective (RTO): in the example, a restore that takes a full 10-hour business day costs about $81,500 before one-time costs, against $32,600 for a 4-hour one. Compare that gap with the price of a faster recovery option. The uptime and SLA calculator shows how much downtime a provider’s SLA allows and how redundancy lowers it.
