A Splunk study revealed that unplanned downtime is rapidly evolving into a systemic business crisis, with Global 2000 firms now losing an estimated US$600 billion annually due to outages.
Downtime costs surge globally
According to The Hidden Costs of Downtime report, produced in partnership with Oxford Economics, the financial impact of downtime has risen by 50% in just two years. On average, organisations now lose US$95 million annually due to outages, nearly double 2024 levels, while each minute of disruption costs approximately US$15,000.
Beyond immediate losses, downtime is also eroding shareholder value. The research found that companies experience an average 3.4% decline in stock price following a single outage, highlighting the broader market implications of operational instability.
“Downtime is inevitable; prolonged disruption is not,” said Kamal Hathi, SVP and GM at Splunk. “The most resilient organisations are not the ones with the most tools or the biggest vision for AI. They are the ones that align technology with business outcomes, empower people with context, and design systems that bend, but do not break, under pressure.”
Hidden risks extend beyond IT
The report underscores how downtime now extends well beyond technical failures, triggering cascading business risks. Data breach disclosures are seen as the most severe consequence, with 71% of technology executives rating them as highly disruptive, up sharply from 23% in 2024.
Other impacts include customer attrition, cited by 81% of leaders, and escalating ransomware costs, which have nearly tripled to an average of US$40 million. Regulatory penalties are also rising, averaging US$51 million per organisation.
Operational strain is another growing concern, with 89% of technology leaders reporting the need for large response teams during incidents. Brand recovery is equally challenging, with nearly one in five marketing leaders indicating it can take an entire quarter to restore brand health.
Security and visibility gaps persist
A key finding is the persistent disconnect between IT operations and cybersecurity. Around 36% of security leaders say downtime is frequently misclassified as an IT issue, delaying appropriate responses and increasing exposure to threats.
Compounding this, only 38% of organisations consistently identify the root cause of outages. The frequency of downtime linked to third-party and SaaS-related cybersecurity issues has also surged, with 56% of security leaders reporting such incidents regularly.
AI reshapes resilience strategies
Organisations are increasingly investing in AI to improve resilience, with a median annual spend of US$24.5 million on tools for incident detection and response. Companies identified as “AI workflow and triage experts” demonstrate stronger outcomes, including higher customer retention and fewer public breach disclosures.
However, risks remain. While 56% of organisations say AI has reduced overall risk, all respondents reported some level of AI-related downtime, and 68% expressed concern about unpredictable AI behaviour.
Shift towards proactive operations
The findings highlight a growing shift towards observability and automation. Nearly three-quarters of IT and engineering leaders now prioritise end-to-end visibility, while 66% are investing in automation to reduce human error—the leading cause of outages.
