Hourly Cost of Downtime: ITIC’s 2024 Survey Results (Category SRE)
Hourly Cost of Downtime — ITIC 2024 Hourly Cost of Downtime Survey Results (Category #SRE)
While preparing for my talk at Positive Hack Days in Luzhniki, I came across ITIC’s short 2024 report on the cost of an hour of downtime. I had not heard of the company, so I checked how much confidence to place in it, the author and the report:
- ITIC is an independent research and consulting firm founded in 2002. It conducts primary research on a wide range of technology topics for vendors and corporate clients.
- The author, Laura DiDio, has more than 25 years of experience in high technology.
- I found the study credible: this is its 11th annual report, based on an independent web survey of more than 1000 companies worldwide between November 2023 and March 2024. The sample spans company sizes: 27% small and medium businesses with up to 200 users, 28% midsize enterprises with 201-1000 users, and 45% large enterprises with more than 1000 users.
The main findings
1) Downtime costs are increasing The report finds that the average cost of one hour of downtime now:
- Exceeds $300k for more than 90% of midsize and large enterprises.
- Exceeds $1 million for 41% of companies.
These are average estimates. Catastrophic failures can cost many times more. The figures exclude litigation costs, fines and civil or criminal sanctions connected with regulatory violations.
2) Causes of downtime Security problems and human error are the main culprits. In the survey, 84% of respondents named security issues as a leading cause, followed by human error at 69% and software flaws at 65%.
3) Availability requirements The survey reports that 90% of organizations now require at least 99.99% availability, or four nines. That is a demanding requirement, allowing less than one hour of unavailability annually.
The implications of these results are: 1) Economic consequences. In a world of interconnected systems operating 24/7, organizations of every size have little tolerance for outages. Even a few minutes can interrupt business and productivity, harm reliability and security, and increase exposure to regulatory requirements and civil or even criminal penalties. 2) Regulated industries, including banking and finance, energy, government, healthcare, hospitality, manufacturing, media and communications, retail, transport and utilities, need to consider potential litigation losses. For some data-intensive organizations, such as stock exchanges, losses can reach millions of dollars per minute. 3) Small and medium businesses face lower absolute downtime costs, but usually lack the large budgets and reserve funds of corporate counterparts to absorb financial losses or potential litigation.
I would use this report’s estimates as initial reference points for downtime costs. They may be particularly useful when making the case for reliability work before you have a precise statistical model for the cost of outages in your own processes and systems.
P.S. If you know of similar reports worth studying, leave them in the comments. I’ll take a close look too.
#SRE #DevOps #Architecture #Software #Processes #Metrics #Engineering