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The rising costs of downtime

3 min read
Time Indicator

by Adam Blau | Apr 25, 2024

IT outages are a financial nightmare. Beyond revenue impact, unplanned downtime translates to lost productivity, frustrated customers, and potential reputation damage.

To understand the true impact of these events, Enterprise Management Associates (EMA) conducted a comprehensive study with more than 400 IT professionals from varying company sizes and roles in North America, EMEA, and APAC regions. Their research delves into the costs of IT outages as well as explores strategies to minimize their frequency, duration, and overall impact.

The true cost of downtime

For years, the IT industry used $5,600 per minute as the average cost of an outage. In 2022, we asked EMA Research to dispel this myth. The 2022 research estimated the average at $12,900 for every minute of unplanned IT downtime. Costs are rising. Unplanned downtime now averages $14,056 per minute, rising to $23,750 for large enterprises.

As they say in late-night television commercials, “Your results may vary.” Actual costs depend on factors including organization size, industry, and the nature of the outage.

Cause for concern: Why downtime costs are rising

The 2024 EMA research highlights a worrying trend: a 60% increase in the average cost per minute for organizations with less than 10,000 employees, yet the largest organizations remained relatively stable with a reported 5% decrease. The research suggests several reasons:

  • Digital transformation: Increased reliance on IT can lead to more complex systems and potential vulnerabilities.
  • Cost-cutting measures: Reducing staff or delaying technology upgrades can hamper outage prevention and response capabilities.

A closer look at cost and impact

EMA also investigated “significant outages,” a term open to interpretation by respondents. The responses show costs increasing for organizations of all sizes. Smaller companies experienced a doubling of costs compared to 2022.

The good news is that organizations also report decreased frequency and duration of outages. The 2024 report shows outages typically falling between 30 minutes and 2 hours compared to previous figures of [2022 data point here].

Today’s arsenal: Automation, AI, and GenAI

You’re not powerless against these costly outages. The research identifies several essential tools and strategies to prevent and reduce downtime.

For example:

  • AIOps and automation: Proactive systems using AIOps are reducing outage frequency and cost. Notably, respondents highlighted the efficacy of AIOps in data collection and incident response. AIOps can reduce outage duration — some organizations resolve incidents within seconds.
  • AI and context: AI can improve incident response significantly by offering proactive solutions, facilitating communication and collaboration, and providing accurate business context and dependencies. Creating a unified view using data from multiple tools and data sources offers a critical advantage.
  • Generative AI: GenAI holds immense potential for incident response and prevention. More than half of respondents anticipate mainstream adoption within a year.

The fight continues with powerful tools

The battle against IT outages is a continuous one. Equip yourself with strategies and powerful tools like AIOps, AI, and GenAI to cut downtime and ensure your teams can operate at peak efficiency.

Download the “IT outages: 2024 costs and containment” report from EMA Research.