Downtime costs organizations up to $1.9M per hour. Here are 5 factors proven to reduce outages.

By: Nic Benders

Digital experiences are now an essential driver of business growth and performance. IT professionals know downtime is a significant setback that impacts customer satisfaction and results in revenue loss. But the scale of that disruption is staggering.?

New Relic recently released the 2024 Observability Forecast, the largest and most comprehensive study in the observability industry. With input from 1,700 technology professionals across 16 countries, the report provides insights into the evolution of observability, identifies key areas of growth and stagnation, and uncovers how external forces are shaping adoption and investment strategies.?

One of the most alarming stats in the Observability Forecast is that organizations are grappling with a median total annual downtime of 77 hours for high-impact outages, with an hourly cost of up to $1.9 million in costs.? On average, respondents estimated the median percentage of engineering team time spent addressing disruptions is 30%, which is 12 hours based on a 40-hour work week.

Those costs are simply untenable for modern businesses. Fortunately, the Observability Forecast also found five factors associated with less downtime and lower outage costs. These same five factors were also linked with less frequent outages, a faster mean time to detection (MTTD), a faster mean time to resolution (MTTR), and less engineering time spent addressing disruptions.?

Here are the five key factors for organizations working to prevent outages and minimize downtime:

1. More observability capabilities

Capabilities — not to be confused with characteristics or tools — are specific components of observability, such as network or database monitoring, alerts, dashboards, log management, and application performance monitoring (APM).

The more capabilities that respondents deployed, the fewer outages they experienced per year. For example, those who deployed five or more observability capabilities experienced 47% fewer annual outages than those who had deployed four or fewer. Those who had deployed 10 or more experienced 62% fewer annual outages than those who had deployed nine or fewer. And those who had deployed 15 or more experienced 69% fewer annual outages than those who had deployed 14 or fewer.

2. Full-stack observability

Only one-quarter (25%) of survey respondents’ organizations had achieved full-stack observability as defined by New Relic. The differences between those who achieve full-stack observability and those who don’t are stark. Organizations with full-stack observability experienced 71% fewer outages per year than those without.?

Notably, organizations with full-stack observability experienced 79% less median annual downtime (70 hours compared to 338 hours), spent 48% less on outage costs per hour ($1.1 million compared to $2.1 million), and 44% less time spent addressing disruptions. They also had a 27% lower annual observability spend and were 51% more likely to learn about interruptions with observability.?

On the whole, the data reveals that organizations with full-stack observability save $42 million each year. Observability delivers a 4x median return on investment.?

3. Unified telemetry data

According to the global survey, telemetry data is unified and siloed in roughly equal amounts. The more tools an organization uses for observability, the more likely they are to have siloed data.

Organizations who had more unified telemetry data experienced 77% fewer annual outages than those who had more siloed telemetry data. Compared to respondents with more siloed telemetry data, those with more unified telemetry data, on average, experienced 78% less annual downtime. They also spent 86% less on annual outage costs, spent 11% less engineering time addressing disruptions, and had a higher ROI.?

4. Integration of business-related data with telemetry data

Business observability is the ability to correlate business outcomes with telemetry data and report them in real time. IT professionals realize the importance of using telemetry data to better understand real-world impacts. The survey found 40% of organizations had deployed business observability.?

On average, those who had deployed business observability experienced 40% less annual downtime, spent 65% less on annual outage costs, and spent 25% less time addressing disruptions compared to those who hadn’t. To practice true business observability, organizations must integrate their business-related data with their telemetry data. Most respondents (87%) had integrated at least one business-related data type with their telemetry data, including 77% who’d integrated at least two and 35% who’d integrated at least five. But just 4% had integrated all 10 types — showing that nearly every organization has room to grow and drive more value from observability.?

Operations data (43%) and customer data (41%) were the most likely to be integrated.

Product research and human resources data (both 32%) were the least likely to be integrated. Compared to those who had less than five business-related data types currently integrated with their telemetry data, those who had integrated five or more spent 82% less on annual outage costs and experienced 63% less annual downtime.

5. Single tool for observability

When asked about the number of tools — not to be confused with capabilities or characteristics — they use to monitor the health of their systems, survey respondents overwhelmingly reported using more than one. But that trend is changing.?

Respondents showed a 2-to-1 preference for a single, consolidated platform compared to multiple point solutions. In fact, the number of respondents using a single tool increased by 37% year-over-year, while the average number of tools decreased by 11% YoY. While 45% were still using 5+ tools for observability, 41% said they plan to consolidate tools in the next year.

Those using a single tool for observability experienced 9% fewer annual outages than those using multiple tools. Compared to those using multiple tools for observability, those using a single tool experienced 65% lower median annual observability spend ($700,000 compared to $2 million), 18% less median annual downtime, 70% less on median annual outage costs, and 50% less engineering time spent addressing disruptions.?

The 2024 Observability Forecast demonstrates the clear correlation between mature observability practices, reliability, and business value. According to the survey, the median annual value an organization received from its observability investment was $8.15 million. For more on the tangible business value of observability, check out the full 2024 Observability Forecast from New Relic.