Most teams know downtime costs money and never put a number on it. The total is almost always higher than lost revenue alone — trust, firefighting time, and deals that never close add up fast.
Use the worksheet below to estimate yours, or the interactive downtime cost calculator. After that: what actually goes into the number, and how to shrink it.
A quick downtime cost calculator
A simple estimate of downtime cost per hour:
| Line Item | Estimate |
|---|---|
| Average hourly revenue | $____ |
| Percentage of revenue lost per hour of downtime | ____% |
| Average engineering hourly rate (fully loaded) | $____ |
| Number of engineers pulled into an average outage | ____ |
| Average time per engineer spent per outage | ____ hours |
| Estimated lost deals/prospects per outage (at average deal size) | $____ |
Total estimated cost per hour of downtime:
(Hourly revenue × % lost) + (Engineering rate × Number of engineers × Hours per outage) + Lost deals
Example for a small SaaS business:
- $5,000/hour average revenue
- 30% lost per hour of downtime (realistic for a product people rely on)
- $150/hour fully loaded engineering rate
- 2 engineers pulled in per outage
- 1.5 hours per engineer per outage
- $3,000 lost deals per outage
Total per hour:
($5,000 × 0.3) + ($150 × 2 × 1.5) + $3,000 = $1,500 + $450 + $3,000 = $4,950/hour
That's almost $5,000 for a single hour of downtime—for a small business. For larger businesses it can be 10x or 100x that.
The hidden costs of downtime
The calculator covers the big line items. A few costs still hide outside the spreadsheet:
1. Lost trust
This is the biggest one that's hard to quantify. If a customer hits your outage at the wrong moment—say, right when they're trying to close a deal or run a critical report—they might not come back. Even if they do, their trust is eroded, and they're more likely to look at alternatives next time their contract is up.
2. Opportunity cost of engineering time
Every hour your engineers spend firefighting an outage is an hour they aren't shipping new features, fixing real bugs, or improving your product. That's work that doesn't get done, and it adds up over time.
3. Team burnout
If your team is getting paged all the time—even for things that aren't real outages—they burn out fast. Burnout leads to slower work, lower quality, and turnover, which is expensive to fix.
How to reduce downtime cost
Two places to cut the bill:
1. Reduce the mean time to recovery (MTTR)
The faster you fix an outage, the less it costs. To reduce MTTR:
- Make sure alerts reach the right person immediately (use escalation policies and on-call rotations)
- Have a runbook for common outages so you don't have to figure it out from scratch every time
- Make sure your status page updates automatically so customers know what's going on without opening tickets
2. Reduce false alerts
This is the one most teams miss. Every false alert trains your team to ignore alerts, which means when a real outage hits, they might not see it right away. It also burns out your team, which makes MTTR worse for real outages.
The best way to reduce false alerts is multi-region consensus: check from several regions at once, and only open an incident when at least two agree in the same round. That eliminates the entire class of false alerts where one region's network is having a rough time but your site is fine everywhere else.
Put it to the test
The cleanest way to know your number is to track it. Log every outage: duration, revenue lost, engineers pulled in, deals lost, customer complaints. After a few months you have a real figure — usually higher than the guess you started with.
Then work the two cuts: lower MTTR, and cut false alerts. The second is what we built Tallwatch for, and you can start free without a credit card.