Every informed IT manager and director knows their number. It’s the cost per minute of downtime, a painful indicator that translates lost time into lost revenue. However, focusing on this one metric is like looking at the tip of the iceberg.
Yes, it is stark, visible and chilling, but the real danger – the one that can sink an entire ship – lurks unseen beneath the surface.
In July 2024, the business and technology world learned a brutal lesson on the subject. A faulty CrowdStrike software update paralysed more than 8 million computers, grounding aeroplanes, halting financial transactions and halting operations at Fortune 500 companies.
The billion-dollar losses were just the first, most obvious shockwave. But is that the whole story? Not at all. The true cost of this and every other major failure spills far beyond the finance department, setting off a devastating domino effect.
First dominoes: the stock market has no mercy
The first cube to fall after a public failure is investor confidence. The financial market today treats technological stability as a litmus test of the operational efficiency of the entire company. A major outage is not seen as an unlucky work accident, but as a fundamental weakness in management and strategy. The reaction is immediate and merciless.
The research leaves no illusions – statistically, a major IT failure leads to an average share price decline of 2.5%. This may not sound dramatic until one realises that the recovery period for these losses is on average as long as 79 days.
That’s almost an entire financial quarter under pressure, with reduced market value and analyst scepticism. Every CEO knows that regaining investor confidence is much more difficult and costly than making up a few percentage points on the chart. It is a protracted reputational battle that starts the second the systems stop responding.
Second domino: Regulators foot the bill
When almost every key public service – from banking to transport to healthcare – is fully digitised, the stability of IT systems has ceased to be an internal company matter. It has become a matter of public interest, and regulators are increasingly willing to step in when that interest is threatened.
The third domino: Cracking customer confidence
It is the last and heaviest domino cube. Its fall cannot be measured in Excel, but its effects are the most toxic and long-term. Money can be made all over again. Trust, once lost, cannot be easily rebuilt.
Everyone has been on the other side at some point: a passenger looking at a board of cancelled flights, a customer whose card payment has been declined, or a user cut off from their key data. It’s a frustration that instantly turns into a loss of loyalty.
In the age of social media, one major breakdown is ready material for an image crisis. Complaints on Twitter, negative reviews on Google and hilarious memes on Facebook live their own lives, destroying a reputation built up over years in just a few hours.
It’s a marketing disaster, the cost of which cannot be put on any sheet. It is a silent exodus of customers to the competition, which, on that particular day, was operating flawlessly.
Investment in resilience is not a cost, it’s a policy for survival
It is time to stop looking at outages through the narrow prism of lost revenue per minute. The true cost of an outage is a complex equation that has to take into account the response of the exchange, penalties from regulators and the priceless value of customer trust.
Therefore, let’s change the perspective. Spending on modern system observability platforms, process automation and proactive risk management is not another cost centre in the IT department.
It is a strategic insurance policy that protects the entire value of the company, its reputation and its future. It is an investment in the most important asset of the digital age: business continuity.
