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An extended period of website downtime is the stuff of nightmares for companies large and small. For a company such as Amazon, even one single minute of downtime can cost as much as $220,318.80 according to the latest calculations. For smaller companies, that figure will be minuscule in comparison, but it’s a number which can quickly snowball the longer your website is offline.
According to research by Gartner, downtime costs companies an average of $5,600 per minute. This study was released in 2014, and a similar study by Avaya calculated the average as between $2,300 to $9,000 per minute depending on a number of factors such as company size and industry. Since these reports were published, these averages have been revised upwards, with a 2016 report from the Ponemon Institute placing the average cost of downtime at nearly $9,000 per minute.
Clearly, website downtime can have a severe impact on the bottom line of even the largest companies. This much is clear not just by theoretical calculations of revenue per minute times the length of downtime, but of historical instances of downtime where companies such as Apple and Amazon have lost tens of millions of dollars in revenue in a matter of hours. To examine this further, we’ve researched some of the most well publicised instances of downtime and have compiled them into a list, cataloguing the top 5 most expensive website downtime periods in history.
In compiling this list, we relied mainly on second-hand reports of downtime, as the companies involved were understandably cagey about the scale of downtime they had experienced. As such, monetary calculations on the cost of downtime are based on the annual revenues posted by each company, divided by day or hour to determine a rough approximation of the cost incurred in any period of downtime.
The first entry on our list takes us back to 2014, when Facebook suffered a 19-minute site-wide outage. Based on Facebook’s revenue for the second quarter of 2014, The Atlantic was able to calculate that a single minute of downtime cost the social media giant $22,453, adding up to roughly $426,607 for the 19 minutes the site went offline. An indirect consequence of the outage was that overall traffic on news sites dropped by 3%, showing how reliant publishers had become on Facebook for traffic by this point.
A year later, in March 2015, Apple suffered an outage that made Facebook’s 19 minutes seem inconsequential by comparison. iCloud, Mac App Store, App Store, iBooks, and iTunes Store all went offline for as long as 12 hours in what the company referred to as ‘an internal DNS error at Apple’. For a company renowned for the reliability and ease of use of its products, this was a huge reputational body-blow. Quite aside from the damage to the Apple brand, the tech giant is estimated to have lost up to $25 million in the half a day the App Store went offline. This number was calculated based on the $18.5 billion ($50 million a day) that the App Store contributed to the Apple coffers in 2014.
In the most recent entry on our list, Facebook suffered a 14-hour blackout on Wednesday 13th March 2019. The downtime also hit Facebook owned products Instagram, Messenger, and WhatsApp and counts as their longest ever period of downtime, resulting in an estimated $89.6 million in lost revenue, and causing a 2 percent tumble in Facebook share prices. The calculation of lost revenue is based on Facebook’s reported $55.8 billion revenue for 2018, which works out at $6.4 million for every hour of downtime!
In 2018, Amazon’s money spinning sale, Prime Day, actually ended up costing the e-commerce giant up to $99 million in lost sales. Shortly after the online sale kicked off, shoppers reported that they were unable to complete their purchases. While the issue was eventually resolved, it’s estimated that Amazon may have lost anywhere from $72.4 million to $99 million in lost revenue during that initial period of downtime. There are few retailers who could take a $99 million hit in such a short period, but Amazon are one of them, as their total sales from Prime Day 2018 were estimated to be $3.4 billion!
The most expensive period of downtime on record also involved Amazon, though this time they weren’t on the receiving end. In March 2017, an employee error took down a large number of websites hosted on AWS (Amazon Web Services). Initially, it appeared that publisher websites were mainly affected, but S&P 500 and U.S. financial services companies are also thought to have been hit by the four-hour outage. According to a report by Axios, the AWS downtime could have incurred losses of $150 and $160 million for the S&P 500 and financial services companies affected.
There we have it. The most expensive period of downtime in history, or at least the most expensive periods of downtime which made it on to public record. It is interesting to see how the list is dominated by the three major companies in technology, social media, and e-commerce – Apple, Facebook, and Amazon. The reason for this is not that their infrastructure is more unreliable than their competitors, but that the revenue they turnover quickly turns minutes of downtimes into millions of dollars in lost revenue. This is a question of percentages, in that downtime contributes to lost sales in proportion to revenue a company generates. So while the sums for a company such as Amazon may be eye-watering, an equivalent period of downtime is likely to be far more damaging for small and medium-sized businesses, who are less able to absorb half a day of lost sales.
For this reason, it is crucial that you monitor the status of your website. Website uptime monitoring services can help you to minimise and proactively address any period of downtime by alerting you the moment your website goes offline. StatusCake provides a suite of performance monitoring tools which are easy to set-up and use, and provide you with invaluable insights into how your website performance is impacting your customers’ experiences. Our free plan includes a range of free tools, including page speed monitoring, while our paid plans include SSL Monitoring, Server Monitoring, Domain Monitoring, and Virus Scanning.
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Find out everything you need to know in our new uptime monitoring whitepaper 2021