What is downtime? Impact, costs and how to reduce it

Customer expectations have changed. Today, people expect instant access to digital services — anytime, anywhere. If a business goes offline, even briefly, it risks losing customer trust, revenue and productivity. That’s why downtime has become a significant existential threat to businesses, especially small and midsize businesses (SMBs). Even a few hours of disruption can leave long-lasting damage on them.

Meanwhile, threats like cyberattacks, hardware failures and system outages have become increasingly common, making it more challenging than ever for businesses to maintain operational continuity. In this article, we’ll break down what downtime really means for businesses and why it happens. We’ll also examine the financial and reputational toll it can take and how to mitigate its impact through strategic business continuity and disaster recovery (BCDR) planning.

What is downtime?

Downtime refers to any period when systems, applications or networks are unavailable or not performing as expected. This disruption can affect internal operations, customer interactions or both. Even a few seconds of downtime can impact productivity, revenue and user experience.

Downtime can be planned, such as scheduled maintenance, or unplanned due to issues like hardware failures, software errors or cyberattacks. While businesses aim for maximum uptime, occasional downtime is unavoidable. The key is how quickly and effectively a business can respond and recover from adversity.

Types of downtime

Downtime falls into two main categories: planned and unplanned. While both interrupt normal operations, they differ in how they occur and how businesses can respond. Understanding the distinction helps organizations prepare for routine disruptions and respond quickly to unexpected ones.

Planned downtime

Planned downtime is scheduled in advance to perform essential tasks such as maintenance, upgrades or patching. Since it’s anticipated, businesses can control when and how it happens — usually during off-peak hours — to reduce its impact on productivity and the user experience.

Common reasons for planned downtime include:

• System upgrades
• Routine maintenance
• Infrastructure changes or data migration
• Security patching

With proper planning and communication, planned downtime can be managed with minimal disruption.

Unplanned downtime

Unplanned downtime happens without warning and is often the result of unexpected failures, external events or cyber incidents. These outages are typically more disruptive and harder to manage, especially if there’s no recovery plan in place.

Examples of unplanned downtime include:

• Hardware failures
• Software bugs or crashes
• Power outages
• Extreme weather events like wildfires, floods and hurricanes
• Cyberattacks like ransomware

Unplanned downtime can lead to operational paralysis, lost revenue and damage to customer trust, especially if recovery is delayed.

Top causes of downtime

Unplanned downtime can strike without warning and disrupt business operations at any scale. Understanding the most common causes is crucial for both prevention and faster recovery. From technical issues to natural events, knowing where vulnerabilities lie helps businesses strengthen their defenses and maintain uptime.

Hardware and software failure

Servers, storage systems and network devices can fail due to age, overload or poor configuration. Software issues — like failed updates or incompatible applications — can also crash systems or corrupt data. Without system redundancy or monitoring in place, even a minor failure can take core services offline.

Power outages

Power loss, whether due to local grid issues or severe weather, can instantly halt operations. Businesses that rely on on-premises infrastructure are especially vulnerable to power outages. Backup power solutions and cloud-based systems can help maintain access when the lights go out.

Cyberattacks

Attacks like ransomware and distributed denial-of-service (DDoS) can lock systems, corrupt data and keep businesses offline for hours or even days. As cyberthreats grow in scale and frequency, even small businesses are increasingly targeted, making security and recovery planning critical.

Human error

Simple mistakes often have major consequences. Accidental file deletions, misconfigured systems or poorly managed updates can trigger outages. Regular training and strict change management protocols can significantly reduce these risks.

Natural disasters

Events like floods, fires or hurricanes can damage physical infrastructure and force extended downtime. Businesses need cloud backups, off-site recovery systems and disaster recovery plans to ensure continuity in the face of large-scale disruption.

How does downtime impact a business?

Downtime affects more than just IT systems. From lost sales to missed compliance targets, it disrupts daily operations, hurts customer experience and can create lasting damage across the business. Top concerns include:

• Lost productivity and revenue: When systems go down, work comes to a halt. Employees can’t access tools, customers can’t make purchases and service teams are left scrambling. Whether it’s an e-commerce checkout failure or a halted production line, every minute offline can mean lost revenue and wasted time.
• Reputational damage: Customers expect fast, reliable service. Frequent or prolonged outages can quickly erode trust and prompt clients to switch to competitors. Rebuilding reputation after a public service disruption can take time — and often comes at a high cost.
• Failure to meet SLAs and compliance: Many businesses operate under service level agreements (SLAs) that require consistent uptime and reliability. Downtime can lead to SLA violations, financial penalties or lost contracts. In regulated industries, it may also put compliance at risk, exposing the business to fines or legal consequences.

The cost of downtime

Downtime comes with a high price — not just in lost revenue, but in productivity, recovery efforts and long-term reputational damage. These direct and indirect costs can quickly add up, especially for businesses that rely on constant system availability. Quantifying these risks helps business leaders make informed decisions about investing in prevention and recovery solutions.

How to calculate the cost of downtime

A simple way to estimate the financial impact of downtime is:

Downtime cost = (Lost revenue + lost productivity + recovery costs + intangible costs) × outage duration

Fig 1: Cost of downtime for businesses

Each part of this formula plays a role:

• Lost revenue: Missed sales or transactions during the outage period.
• Lost productivity: Employee wages paid during idle time when systems are down.
• Recovery costs: Expenses related to emergency repairs, IT support and overtime work.
• Intangible costs: Brand damage, customer churn and lost future opportunities.

Every organization’s cost profile is different, but industry reports show that downtime can cost SMBs anywhere from thousands to millions of dollars per day, depending on size, sector and system reliance.

To understand how downtime could affect your business or your client’s business, try running the numbers with the Recovery Time and Downtime Cost Calculator. A clear view of the financial impact makes it easier to prioritize business continuity planning.

How to reduce downtime

Minimizing downtime comes down to building resilience into every layer of your infrastructure. From preventative maintenance to rapid recovery, a proactive approach ensures your business stays up and running, even when disruptions occur. Below are essential strategies every organization should adopt to reduce the risk and impact of downtime.

Implement redundancy and failover systems

Redundancy is the first line of defense against system failure. By duplicating critical components — such as servers, storage devices or network paths — businesses ensure that operations can continue even if a primary system fails. Failover solutions take this further by automatically switching operations to backup systems when issues are detected.

For example, if a primary server crashes, a failover system immediately redirects operations to a secondary server without requiring manual intervention. Cloud-based failover systems are particularly effective, providing scalable backup environments that ensure uninterrupted service continuity.

Perform frequent backups and verify recoverability

Backups are essential, but their true value lies in how quickly and reliably they can be restored. Businesses should schedule automated backups of all critical data and applications, ideally on a daily or even hourly basis, depending on their operational needs. These backups should be stored both on-site and off-site to protect against local failures or disasters.

Equally important is verifying recoverability. Regularly test your backups to ensure data can be restored within acceptable timeframes. This ensures that in the event of a failure, you can resume operations without significant data loss or downtime.

Leverage automated, real-time monitoring

Real-time monitoring systems help detect issues before they escalate. Automated monitoring tools track system performance, resource usage and anomalies across infrastructure. When a potential problem is identified — such as abnormal CPU usage or a failing disk — alerts are triggered, allowing IT teams to act quickly.

Real-time visibility into your environment reduces the chances of being caught off guard by system failures or performance bottlenecks. With predictive analytics, some monitoring platforms can even flag issues before they impact operations.

Conduct regular system maintenance and updates

Systems degrade over time, and outdated software or hardware introduces risk. Regular maintenance ensures infrastructure remains healthy and secure. This includes applying security patches, firmware updates and software upgrades to address vulnerabilities and maintain compatibility.

Preventive maintenance also helps detect signs of wear, system errors or failing components. By resolving these issues proactively, businesses can avoid sudden disruptions and improve overall reliability.

Train employees to minimize human error

Human error remains one of the most common — and avoidable — causes of downtime. Mistakes, such as misconfiguring network settings, deleting critical files or applying updates incorrectly, can bring systems down unexpectedly.

To mitigate this risk, businesses should provide ongoing training for all employees, particularly those responsible for managing IT systems and networks. Clear documentation, access controls and standardized processes help create a structured environment where errors are less likely to occur. Regular refresher courses and scenario-based training can further strengthen awareness.

Develop a comprehensive BCDR strategy

Even with strong preventive measures, some disruptions are unavoidable. That’s where a business continuity and disaster recovery (BCDR) strategy becomes critical. A well-designed BCDR plan outlines how the business will respond to disruptions and how quickly operations can be restored.

This plan should identify mission-critical systems, establish clear recovery objectives (RTO/RPO) and assign roles and responsibilities during a crisis. It should also include detailed communication procedures to keep internal teams, customers and partners informed during incidents.

By embedding BCDR into your business operations, you can limit downtime and recover with confidence when disruptions strike.

Minimize downtime with Datto BCDR

Downtime may be inevitable, but how quickly a business recovers is within its control. The right tools and planning make the difference between hours of disruption and a fast, seamless recovery.

Datto BCDR is purpose-built to help MSPs and IT teams stay resilient against downtime. It combines automated backup, instant failover and built-in verification to reduce downtime and keep operations running no matter what comes their way.

Here’s how Datto BCDR helps businesses maintain uptime and continuity:

• Automated backups: Datto backs up data as frequently as every five minutes, ensuring you always have a recent recovery point and minimizing potential data loss.
• Instant virtualization, locally or in the cloud: If systems go down, Datto can instantly virtualize them — on-site, in the cloud or both — so operations can resume within minutes.
• Automated backup verification: Every backup is tested automatically to ensure it boots successfully and that applications and services function as expected.
• Flexible recovery options: Whether you need to restore a single file, a folder or an entire environment, Datto gives you complete control over how you recover.

With Datto BCDR, businesses are not only prepared for downtime; they’re also equipped to recover quickly and keep operations running smoothly without interruption. Explore Datto BCDR to discover how it keeps businesses cyber resilient at all times.