Downtime in Essential Business Applications Carries a Hefty Price Tag
Downtime in Essential Business Applications Carries a Hefty Price Tag

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The incorporation of observability continues to grow, with enhanced full-stack observability leading to improved service-level metrics. This includes the occurrence of fewer and shorter outages as well as reduced associated costs, as reported by New Relic.

Organizations have reported a median return of $2 for every $1 spent on observability. Impressively, 41% of these organizations have noted more than a $1 million total annual value return.

The research also highlighted a trend: companies in 2023 are employing fewer observability tools than they did in 2022. Instead, they’re leaning towards single, integrated observability platforms. Despite this, the process of monitoring remains disjointed across numerous firms, with many yet to fully monitor their complete technology stacks. However, there’s a silver lining: there has been a significant year-over-year deployment of more observability capabilities, with 58% of organizations achieving full-stack observability.

Regarding the substantial costs associated with downtime, 32% of those surveyed indicated that outages in vital business applications could lead to expenses surpassing $500,000 for every downtime hour. An annual median outage cost of $7.75 million was reported, but organizations with full-stack observability saw a 59% reduction in this cost.

Observability trends indicate changes on the horizon. Even though the majority of organizations aren’t fully monitoring their technology stacks, a 58% YoY growth in full-stack observability has been noted. By the middle of 2026, projections suggest that at least 82% of surveyed parties will utilize all 17 unique observability capabilities.

The dilemma of tool proliferation persists across businesses of all scales, even though there’s a clear 2-to-1 preference for singular, unified platforms. On a brighter note, the number of organizations adopting a singular tool has more than doubled from the previous year, while the average number of tools utilized has declined by nearly one.

Peter Pezaris from New Relic commented on the high cost of outages, emphasizing that those equipped with full-stack observability consistently face fewer outages. Such organizations are also more adept at promptly identifying and rectifying issues, leading to reduced outage costs and enhanced returns on investment.

One major revelation from the report is that organizations with full-stack observability benefit from refined service-level metrics. This not only hastens issue detection and resolution times but also amplifies the returns on their investments.

It’s evident that an investment in observability yields considerable returns. Those with more than five deployed observability capabilities were 40% more likely to swiftly detect significant outages compared to their counterparts with fewer capabilities. The associated costs of outages are also staggering, with 61% of participants stating that each hour of downtime can cost upwards of $100,000. Thus, the benefits of full-stack observability can translate into massive annual savings, with some estimating a reduction of $3.66 million annually.

The significance of observability doesn’t escape the respondents, many of whom link the absence of such solutions directly to increased operational expenses and potential revenue losses due to downtime.

The report also showcases that both hands-on professionals and IT decision-makers recognize various advantages from their existing observability solutions. For instance, 46% of hands-on professionals believe it enhances their efficiency, allowing quicker issue identification and resolution, while 35% of IT decision-makers feel it aids in attaining technical and business KPIs.

The drive towards observability is evident, with predictions suggesting that by 2026, over 82% of respondents will have all 17 different observability capabilities in place. With the potential of most organizations having robust observability practices in place within the next three years, the industry’s growth potential becomes apparent.

Factors like an increased emphasis on security, the integration of business applications into workflows, and the rise in AI technologies are driving the observability trend. This emphasis on security is a reflection of the challenges posed by intricate cloud-native application structures and their associated risks. OpenTelemetry’s rising popularity, underscored by its scalability and integration capabilities with existing tools, indicates a shift that vendors must consider to cater to consumer needs.