Digital Blindspot: IT outages in Indian businesses have a median cost of $63 million each year

Neglecting their ageing IT infrastructure is costing Indian businesses big time, a new study has found. Apparently, the median cost of an IT outage among Indian businesses stands at around $62.79 million, or roughly Rs 523 crore a year.

Do note that this isn’t an average figure, but a median figure, which means that there are a few firms that are paying considerably more, perhaps even thousands of crore.

New Relic, the comprehensive observability platform designed for engineers, has recently released its 2023 Observability Forecast report. This report delves into the ever-evolving landscape of observability, its profound influence on the daily lives of technical experts, and its significant impact on businesses’ financial performance.

In this year’s edition, the survey encompassed the insights of 1,700 technology professionals spanning 15 different countries. Its primary goal was to gain a comprehensive understanding of the current state of observability, identify areas experiencing the most and least growth, and pinpoint the external factors that are shaping expenditure and adoption trends.

Remarkably, this marks the third annual iteration of the study, making it not only the largest but also the most extensive of its kind. Notably, it is the sole report of its kind that openly shares its unprocessed data with the public.

The findings of this report uncover a staggering financial toll caused by IT outages in India. Respondents from the country reported a median annual outage cost averaging an astonishing US$62.79 million.

Interestingly, 74 per cent of these respondents indicated that the implementation of observability solutions had a positive impact on the resolution time for these outages. In a striking revelation, it was noted that a substantial majority of C-suite executives in India, including 77 per cent of those with a strong technical focus and 74 per cent of their less technically oriented counterparts, were fervent proponents of observability.

The research also highlighted a significant challenge faced by organizations in India – tool sprawl. They stood out as the country employing the highest number of tools by a considerable margin, with nearly 72 per cent using more than 10 tools for observation. Strikingly, none of the Indian respondents reported relying on a single platform exclusively for observation.

However, 51 per cent expressed a preference for a unified, consolidated platform. Excessive reliance on multiple monitoring tools emerged as the most formidable obstacle to achieving complete full-stack observability. Additionally, a substantial 33 per cent of Indian organizations disclosed plans to streamline their toolset in the coming year, with the aim of optimizing the value derived from their observability investments.

Peter Marelas, Chief Architect for the Asia-Pacific Japan (APJ) region at New Relic, commented on these findings, stating, “Tool sprawl and data silos are significantly hampering the ability of Indian organizations to mitigate downtime and its associated costs.”

He added “The Observability Forecast highlights that a substantial 43 per cent of Indian businesses have isolated telemetry data, resulting in blind spots when it comes to monitoring and maintaining system health. It is evident that embracing full-stack observability can provide effective solutions to some of the most pressing challenges confronting Indian organizations today.”

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