Observability cuts outage costs for ANZ businesses in 2024
New Relic has published its 2024 Observability Forecast, detailing significant findings regarding the state of observability and its impact on businesses in Australia and New Zealand (ANZ).
The report surveyed over 1,700 technology professionals in 16 countries, highlighting that the median outage cost for high-business-impact outages in ANZ stands at USD $2.2 million per hour. This figure surpasses the overall median outage cost of USD $1.9 million per hour as reported by global respondents. Furthermore, a striking 79% of ANZ businesses experience costs of USD $1 million or more per hour during critical business application outages.
There is a notable connection between full-stack observability and the reduction of downtime and interruptions, resulting in lower annual outage costs. Engineering teams reportedly provide 30% of their time addressing issues related to outages, reinforcing the necessity of observability in enhancing operational efficiency and business performance.
The leading causes of unplanned outages identified include network failure (35%), third-party or cloud provider services failure (29%), and human error (28%). Observability emerges as a valuable tool in mitigating costs associated with these disruptions, as 65% of respondents noted an improvement in their Mean Time to Resolve (MTTR) following its adoption.
Business app integration was identified as the primary driver for observability in ANZ, particularly the integration of enterprise resource planning (ERP) and customer relationship management (CRM) applications into workflows. This was followed closely by a focus on security, governance, risk, and compliance, as well as the adoption of open-source technologies and the development of cloud-native architectures.
Deployments across ANZ companies show extensive use of network monitoring, with nearly half implementing this, followed by security and infrastructure monitoring. Globally, the most deployed capability is security monitoring, with emerging AI-related capabilities like AIOps and machine learning (ML) model monitoring expected to increase.
Peter Marelas, Field Chief Technology Officer for APJ at New Relic, emphasised the significance of these findings: "With outages in Australian and New Zealand costing businesses up to millions of dollars per hour, it's clear that the need for full-stack observability in the region has never been greater. The Observability Forecast has once again highlighted the tangible business benefits that observability delivers including less downtime, fewer critical outages, and high ROI, and cemented its role in helping organisations achieve their core business goals."
The report also indicates that most ANZ companies receive substantial returns on observability investments, with 79% realising USD $5 million or more annually. The return on investment (ROI) was notably quantified at 3.9 times for Australian companies, with New Zealand entities reaching 4 times ROI.
Despite these benefits, tool fragmentation continues to pose challenges, as over half (56%) of regional respondents utilise five or more observability tools. A preference for a consolidated observability platform was demonstrated, with 63% expressing this need.
Data silos remain a concern within ANZ organisations, with nearly 40% reporting more siloed telemetry than unified data. Enhancements in observability have, however, supported better data visualisation and key performance indicator achievements, as noted by a substantial portion of IT decision makers in the region.
The study has underscored business observability's prominence, suggesting that companies employing telemetry data achieving benefits like reduced downtime and cost savings. With further deployments planned, the value of observability is expected to grow within IT operations globally.
