The $600 Billion Wake-up Call: New Splunk Research Reveals Downtime is a Systemic Business Crisis

Cisco announced the release of Splunk’s latest research, The Hidden Costs of Downtime, revealing the aggregate cost of unplanned downtime for Global 2000 companies has surged to $600 billion annually – a 50% increase in just two years.

In partnership with Oxford Economics, the Splunk study shows that the financial toll of an outage is immediate, severe, and potentially long-lasting. Downtime has become a systemic business crisis that threatens revenue, brand equity and shareholder value, costing an organization $95 million in lost revenue annually. This is nearly twice the level seen in 2024.

“Downtime is inevitable; prolonged disruption is not,” said Kamal Hathi, SVP and GM, Splunk, a Cisco company. “The most resilient organizations 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.”

Technology executives increasingly view the consequences of an outage as more severe. Publicly disclosing a data breach is now considered the most severe hidden cost, with 71% of technology executives rating it as very or prohibitively disruptive, up from 23% in 2024. Furthermore, downtime triggers a chain reaction of hidden costs, including:

About one-third (36%) of security leaders admit that downtime is often or very often misclassified as an IT issue, which can give attackers a critical head start. A lack of shared context complicates resolution, as only 38% of technology executives report consistently identifying the root cause of a downtime incident. The perceived frequency of cybersecurity-related downtime caused by SaaS and other third-party application issues has nearly tripled since 2024, with 56% of security leaders now experiencing these issues often or very often. Maintaining basic cyber hygiene and modernizing legacy infrastructure to replace outdated, unpatchable technology remain foundational to preventing unplanned downtime.

Organizations are increasingly turning to AI to enhance incident triage and root cause analysis, with a median annual spend of $24.5 million on AI tools that prevent and respond to downtime. As these technologies mature, the industry is shifting toward a model of human-to-agent collaboration, where AI serves the expert rather than replacing human oversight. This approach relies on machine data, the logs, metrics, and traces that allow teams to monitor AI actions, detect issues early, and correct course before minor errors escalate into full-scale outages.

The data reveals that organizations identified as “AI Workflow and Triage Experts,” are significantly better equipped to avoid the most damaging outcomes of downtime:

Despite the clear benefits, the transition to autonomous systems is not without challenges. While 56% of users report that AI has reduced their overall risk, every technology leader surveyed admitted their organization has experienced some form of AI-related downtime. Sixty-eight percent of technology leaders express concern their AI agents will behave unpredictably, underscoring the need for robust governance and human-in-the-loop oversight that defines true digital resilience.

Technology executives increasingly recognize the need to visualize the entire digital dependency chain. In fact, among organizations with the lowest downtime costs, a massive 98% confirm that end-to-end visibility is very or extremely important for reducing incidents. Nevertheless, complete visibility remains rare across IT domains, prompting organizations to shift their investment strategies toward more proactive, data-driven foundations:

For further details on methodology and findings of The Hidden Costs of Downtime report, please visit the Splunk website.

Oxford Economics fielded a hybrid survey using CATI (Computer Assisted Telephonic Interviewing) and online methods. The fieldwork captured responses from 2,000 executives from Global 2000 companies. Businesses from 20 countries are represented from APAC, EMEA, North America, and LATAM. Respondents hail from nine industry groups: financial services, retail and consumer goods, public sector, manufacturing, energy and utilities, healthcare and life sciences, information services and technology, transportation and logistics, and communications and media. Respondents come from technology (including security, IT, and engineering titles), finance (including Chief Financial Officers), and marketing functions (including Chief Marketing Officers).

Source: Cisco media announcement