Incident Type: Service Outage · Updated July 2026

Service Outage Cost: What IT Downtime Costs in 2026

Q: How much does an hour of downtime cost?

Downtime cost per hour varies significantly by organisation size and industry. For mid-market organisations, the average is approximately $840,000/hr ($14,000/min). Large enterprises average $1.425M/hr ($23,750/min). Siemens puts an idle automotive assembly line at a major plant at up to $2.3M/hr, oil and gas at roughly $500,000/hr and FMCG at roughly $36,000/hr (True Cost of Downtime 2024). According to Gartner, over 90% of organisations with annual revenues above $50M report downtime costs exceeding $300,000 per hour.

Q: What is the cost of downtime per minute?

PagerDuty research calculates $4,537 per minute of P1 downtime as an average across survey respondents. More granular benchmarks: small businesses average $425-$9,000/min; mid-market organisations average $9,000-$23,750/min; large enterprises average $23,750-$40,000/min. Ecommerce platforms during peak periods (Black Friday, Prime Day) can exceed $100,000/min.

Q: Is a service outage a security incident?

A service outage may or may not be a security incident. Availability incidents that are caused by cyberattacks (ransomware, DDoS) are both outages and security incidents. Outages caused by infrastructure failure, software bugs, or operational errors are availability incidents but not security incidents. The CrowdStrike July 2024 event was an outage caused by a software update error, not a cyberattack, though it was widely reported alongside security news due to the vendor involved.

Q: How do you calculate downtime cost?

The standard formula is: Downtime Cost = (Revenue per hour x Duration hours) + (Employees affected x Avg hourly cost x Duration hours) + SLA penalties + Recovery cost. For customer-facing revenue: divide annual revenue by 8,760 hours to get hourly revenue, then multiply by outage duration. Add 10-20% for productivity loss from staff managing the incident. Add SLA credit obligations and post-incident remediation costs.

$794K

Avg P1 incident

$14K/min

Mid-market avg

$23.75K/min

Large enterprise

$2.3M/hr

Automotive mfg

A service outage is an availability-impacting incident where a service becomes partially or fully unavailable to users. Outages are distinct from security incidents: they may be caused by infrastructure failure, software bugs, capacity issues, or cyberattacks. For a comprehensive deep-dive into downtime cost modeling, visit outagecost.com.

Cost by Incident Severity

Severity	Definition	Avg Cost Range	Typical Duration
P1 / SEV-1	Full service down, all customers affected	$500K-$2M+	2-8 hours avg
P2 / SEV-2	Major degradation or partial service unavailability	$50K-$500K	4-24 hours avg
P3 / SEV-3	Significant impact, workarounds available	$5K-$50K	Hours to days
P4 / SEV-4	Minor impact, low urgency	$500-$5K	Days to weeks

Source: PagerDuty State of Digital Operations 2024; averages across survey respondents

Downtime Cost by Industry

Industry	Downtime Cost	Notes
Automotive manufacturing	Up to $2.3M/hr	Siemens True Cost of Downtime 2024; idle assembly line at a major plant
Oil and gas	~$500K/hr	Siemens True Cost of Downtime 2024; more than double the 2019 figure
FMCG	~$36K/hr	Siemens True Cost of Downtime 2024
Mid-market (all industries avg)	$14K/min ($840K/hr)	PagerDuty 2024 benchmark
Financial services	Not published per hour	No primary survey publishes a per-hour figure; drivers are per-transaction loss, regulator notification and settlement-window penalties
Healthcare	Not published per hour	No primary survey publishes a per-hour figure; drivers are care diversion, EHR unavailability and elective-procedure cancellation
Ecommerce (peak)	Model it from your own revenue	Peak-hour revenue divided by hours, times the share of sales the outage blocks; a generic per-minute figure will not transfer

Why Outage Cost Varies Wildly

Revenue profile

A SaaS company with $50M ARR loses $5,700/hr to revenue; a B2B software firm with weekly billing cycles may lose relatively little in a 4-hour window.

Time of incident

Weekend maintenance windows vs peak trading hours vs Black Friday: the same 1-hour outage can cost 100x more depending on timing.

Customer-facing vs internal

Internal system downtime affects productivity; customer-facing downtime affects both revenue and reputation. The multiplier is typically 3-5x.

Recovery path

Failover to standby system vs manual workaround vs full rebuild: recovery path determines both duration and recovery cost component.

Compounding costs

Extended outages trigger SLA penalties, customer churn, and support surge costs that compound the direct downtime cost significantly.

Regulatory environment

Financial services and healthcare face mandatory regulator notification for outages above certain thresholds, adding regulatory response cost.

Go Deeper on Outage Cost

For downtime cost per minute by availability tier (99.9% vs 99.99%), SLA economics, monitoring cost, and MTTR-to-cost tables, visit the dedicated outage reference site.

outagecost.com - Full Downtime Cost Reference

Frequently Asked Questions

How much does an hour of downtime cost?

Mid-market organisations average $840,000/hr ($14,000/min). Large enterprises average $1.425M/hr ($23,750/min). Siemens puts an idle automotive assembly line at up to $2.3M/hr, oil and gas at roughly $500K/hr (True Cost of Downtime 2024). Gartner reports 90%+ of mid-market+ organisations have downtime costs exceeding $300K/hr.

What is the cost of downtime per minute?

PagerDuty reports $4,537/min as an average across survey respondents. SMBs average $425-$9,000/min. Mid-market $9,000-$23,750/min. Enterprise above $23,750/min. Ecommerce peak periods can exceed $100,000/min.

Is a service outage a security incident?

Not always. Outages caused by cyberattacks (ransomware, DDoS) are both. Outages from infrastructure failure, software bugs, or operational errors are availability incidents but not security incidents. The CrowdStrike July 2024 event was a software update error, not a cyberattack.

How do you calculate downtime cost?

Formula: (Revenue per hour x downtime hours) + (Staff hours on incident x loaded hourly rate) + SLA penalties + recovery cost. Divide annual revenue by 8,760 for hourly revenue. Add 10-20% for productivity loss from the response team.

Which industries have the highest downtime cost?

Among sectors with a published per-hour figure, automotive manufacturing is highest: Siemens puts an idle assembly line at a major plant at up to $2.3M/hr, against roughly $500K/hr for oil and gas and $36K/hr for FMCG (True Cost of Downtime 2024). Financial services and healthcare are widely assumed to be higher still, but no primary survey publishes a per-hour figure for either, so treat any circulating number for them with caution. Their cost drivers are real: per-transaction loss, regulator notification and settlement-window penalties in finance; care diversion and EHR unavailability in healthcare.