$600bn lost every year to downtime as organizations battle hidden costs

The cost of unplanned downtime for large firms has shot up by 50% in just two years, with Global 2000 companies losing around $600 billion per year.

In its new report, The Hidden Costs of Downtime, Cisco unit Splunk has found that downtime now costs organizations an average of $15,000 per minute and nearly $95 million in lost revenue annually – twice as much as in 2024.

The most severe cost is publicly disclosing a data breach, with just over seven-in-ten technology executives rating it as very or prohibitively disruptive – more than three times as many as in 2024.

Alongside the obvious costs, the survey found, organizations see an average 3.4% drop in stock price following a downtime event. And there's also an effect on customers, with 47% admitting customers are often the first to detect service degradation or outages, and, as a result, 81% said this had ultimately cost them customers. Worse, nearly 20% of marketing professionals report that it takes an entire quarter to recover brand health following remediation.

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"It's the direct impact on your customers and employees that can turn a technical problem into a total business crisis," said Kamal Hathi, SVP and GM at Splunk.

Meanwhile, with threat actors now calculating ransoms based on a victim's specific downtime costs, payouts have nearly tripled since 2024, reaching $40 million on average.

"Watching companies suffer nine-figure losses makes the abstract risk of a cyberattack feel real and immediate," commented Peter Sprenger, Splunk field CTO.

Thanks to regulations like the EU's GDPR and Digital Operational Resilience Act (DORA) and new standards for financial institutions, fines have escalated significantly over the last three years. They're now costing an average of $51 million per organization, with 57% of technology executives now viewing these penalties as very or prohibitively disruptive.

And there's also the issue of operational drag, with 89% of tech leaders citing the need for large numbers of personnel to fix issues. Nine-in-ten tech leaders said they've seen demand for customer support rise, with 76% of finance and 74% of marketing executives also feeling the pressure.

One thing that doesn't help is that, according to 36% of security leaders, downtime is often or very often misclassified as an IT issue, and only 38% saying they can consistently identify the root cause of a downtime incident.

And SaaS and other third-party application issues are on the rise, nearly tripling since 2024, with 56% of security leaders now experiencing these issues often or very often.

The best tactic, said Splunk, is to introduce strong AI-driven incident response and observability capabilities. Three-quarters of organisations identified as 'AI Workflow and Triage Experts' were able to avoid the need to publicly disclose a data breach last year, compared with just 54% of non-experts, and were also nearly three times more likely to report that they have never lost customers due to downtime.

"Downtime is inevitable; prolonged disruption is not," said Hathi. "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."