BigPanda released the findings of a new report titled "The Modern IT Outage: Costs, Causes and Cures," which found that the average cost of an IT Outage is $12,913 per minute. Produced in conjunction with Enterprise Management Associates (EMA), the report also found a correlation between IT outage costs and the size of an organization, as businesses with more than 20,000 employees lose an average of $25,402 per minute due to outages, translating to more than $1.5 million per hour.

"For years there has been a largely unchallenged urban legend that the cost of an IT outage is $5,600 per minute, but our research shows it's actually more than double that amount," said Assaf Resnick, co-founder and CEO at BigPanda. "Ultimately, this underscores the importance of minimizing IT outages on the front end and acting quickly to remediate them if and when they do occur. Particularly in the face of economic uncertainty and an IT talent shortage, the numbers validate how imperative it is for today's organizations to adopt AIOps to lower the risk of frequent, lengthy, and costly outages."

Outage Costs Increase With Company Size
While the research found that IT outages cost $12,913 on average, actual costs depend on a number of variables. For example, for businesses with 1,000-2,500 employees, IT outages cost an average of $1,850 per minute. But that number jumps to $8,424 per minute for businesses with 5,000-10,000 employees.

The larger the company, the more risk there is when it comes to outages. Larger companies need to consider things such as potential revenue at risk, the number of people who could be impacted, and even the possibility of associated fees, penalties or litigation.

"Even though IT outages cost less on average for smaller companies, they can be even more devastating - smaller enterprises often have fewer resources to recover from the business impact," Resnick said.

The way outages are caused can also vary widely. Hardware or infrastructure failure (28.0%), change/configuration issues (27.3%) and human error (23.7%) were some of the top reasons cited by survey respondents.

Outages Disrupt Customers, Teams and Revenue
In the era of digital transformation, organizations are laser-focused on minimizing disruptions to customer and user experiences. Therefore, it's no surprise that the No. 1 concern for IT executives and leaders when it comes to outages was business disruption, at 55%. Outages force ITOps, NOC and DevOps/SRE teams into a reactive posture and can waste precious hours or even days. Again, it's no surprise that the impact on employee productivity followed closely at 54.7%. Finally, in digitally transforming enterprises, apps and services are responsible for a growing share of revenue; survey respondents are clearly feeling the pain with 43.3% citing lost revenue as an important element of the cost of an outage.

When it comes to the length of significant outages, 22% of respondents said they last fewer than 30 minutes, while 40% said they typically last between 20 minutes and an hour. Another 22% said they can last up to two hours, while 9% said two to four hours, 5% said half a day or more, and just 2% said a day or more.

The BigPanda/EMA report is based on responses from 300 global managers, directors, vice presidents, and executives at businesses in the North America, EMEA and APAC regions. Companies were evenly distributed across those ranging in size between 1,000 employees through 20,000-plus employees in a wide mix of industries.

To download a full copy of the report, click here.