The Hidden Costs of Downtime

The following is an extract from Splunk’s 2024 Hidden Costs of Downtime report

Disruption in business is inevitable. The most successful organizations today adapt to system stressors and bounce back quickly because they invest in a solid foundation of digital resilience. And yet, unplanned downtime continues to test that resilience and, in many cases, exacts a significant toll.

The true financial impact and nature of downtime are hard to pin down. Researchers often focus only on downtime caused by traditional IT issues, overlooking incidents brought on by cybersecurity failures, while also leaving secondary economic ramifications out of the equation. We weren’t satisfied with an incomplete picture.

In partnership with Oxford Economics, a global research institute, Splunk quantified the total cost of downtime for the Global 2000 to be $400 billion annually. These companies lose $200 million on average each year because their digital environments fail unexpectedly.

It turns out, there is also much more beneath the surface. We uncovered considerable hidden costs — like billiondollar impacts to market cap — that may deal an even larger economic blow to companies. The data also confirmed what we’ve long suspected: Cybersecurity and infrastructure or application issues are both sources of downtime.

Gary Steele, President of Go-to-Market, Cisco & GM, Splunk