IT outages can cost businesses up to $100,000 every hour, survey finds

IT outages with high business impact torch a median of $7.75 million, according to a recent survey from full-stack observability tool firm New Relic.

New Relic partnered with Enterprise Technology Research (ETR) to poll 1,700 technology professionals in 15 countries, and found that around three in five (61%) said outages cost at least $100,000 per hour. Nearly one-third (32%) said outages blow through at least $500,000 an hour, while one in five (21%) said outages burn through an impressive $1 million or more per hour.

According to the survey, around 44% of respondents said their mean time to detect high-impact outages was at least 30 minutes or more, with one in five (21%) saying it took at least an hour. An additional 34% reported high-impact outages at their organizations had an average mean time to resolution of over an hour.

Peter Pezaris, chief strategy and design officer at New Relic, told IT Brew the report shows a clear relationship between the duration and cost of outages and observability, or the behavior, performance, and health of a tech stack.

“The largest single driver of outages and the relative cost of restoring service is blind spots,” Pezaris said. The survey found 65% of respondents reported their mean times to resolution have improved since adopting observability tools.

Outages tend to be costlier the larger an organization gets, and come mostly in the form of lost revenues rather than the cost of resolution itself, Pezaris said.

“Big businesses are relying more and more on their production infrastructure in order to impact their top and bottom line,” Pezaris said “Not only are companies looking to find easier ways to transact with their customers through their websites and mobile apps, but the services that go into building those applications are getting more and more expensive.”

One category where outages can be particularly disruptive is data centers. The Uptime Institute’s Executive Director of Research Andy Lawrence told Network World that while information on data center outages is “opaque and unreliable,” the institute’s Annual Outages Analysis 2023 found evidence the cost of outages is rising even as they become less severe.

In 2019, according to the Uptime Institute’s data, 60% of outages cost less than $100,000 in direct and indirect costs. That percentage fell to 39% by 2022. The institute’s analysis also found the vast majority of data center outages occur at third-party commercial operators and the main cause is human error.

Massive incidents like the Southwest Airlines outages during the 2022 holiday season—which ran the company costs up to $825 million and forced it to commit $1 billion towards IT modernization—attract the most attention. But small businesses aren’t immune, either. NBC News reported a September 2023 outage at payment processor Square cost some small companies who rely on the company for both wholesale and retail payments thousands of dollars.