Critical business application outages cost $500,000 per hour of downtime
Adoption of observability is on the rise and full observability leads to better service level indicators, such as fewer and shorter outages and lower outage costs, according to New Relic.
Respondents receive a median return of $2 per $1 investment in observability, with 41% receiving a total annual value of more than $1 million.
According to the study, organizations are using fewer observability tools than in 2022 and are starting to adopt single, consolidated observability platforms. Although monitoring is still fragmented and most organizations are not yet monitoring their entire technology stack, more observability capabilities have been deployed year over year, and 58% more organizations have achieved complete observability.
Full-stack observability is on the rise
32% of respondents said critical business application outages cost more than $500,000 per hour of downtime. Respondents report a median annual outage cost of $7.75 million, with those with full observability experiencing a 59% lower median outage cost than those without full observability.
Although most organizations still don’t monitor their entire technology stack, this is changing. Full-stack observability increased by 58% year-over-year. By mid-2026, at least 82% of respondents planned to deploy each of 17 different observability capabilities.
The proliferation of tools remains an obstacle for organizations of all sizes, despite a 2-to-1 preference for a single, consolidated platform. However, the proportion using a single tool more than doubled year over year, and the average number of tools deployed decreased by almost one tool.
“High business impact outages are incredibly costly for today’s organizations,” said Pierre Pezaris, director of strategy and design at New Relic. “The report shows that teams with full observability consistently experience fewer outages while detecting and resolving issues faster than those without it. This results in lower outage costs, higher annual ROI and a positive effect on an organization’s bottom line. The business value of observability is clear.
The high price of breakdowns
One of the key takeaways from the report is that organizations that achieve full observability improve service level metrics, particularly mean time to resolve (MTTR) and mean time to detect (MTTD), and gain get the most out of their investments. Respondents with full observability were more likely to experience the fastest MTTR and MTTD (less than 30 minutes), as well as see the greatest improvement for both metrics year-over-year.
Research shows that investing in observability pays off. For example, respondents who said their organization currently had more than five observability capabilities were 40% more likely to detect high-business-impact outages in 30 minutes or less, compared to those who had deployed one. at four.
As critical business application outages become increasingly costly (61% said downtime costs at least $100,000 per hour), the impact on service level indicators translates into significant savings. Organizations with full observability experienced median outage costs of $6.17 million per year, compared to $9.83 million per year for those without full observability, a savings of $3.66 million per year.
Respondents recognize the significant financial issues related to observability. When asked to name the most important business outcome if an organization did not have an observability solution, they highlighted the concrete impacts of increased operating costs and lost revenue due to downtime.
Observability remains a business imperative for business leaders
According to the report, IT practitioners and decision makers are seeing clear but different benefits from their current observability solution.
46% of practitioners said it increased their productivity, allowing them to find and resolve issues faster. 35% of IT decision makers say it helps them achieve technical key performance indicators (KPIs) and/or business KPIs (31%).
Of all respondents, 40% said improved system availability and reliability was a primary benefit (13% more than last year), while 38% cited operational efficiency. increased and 34% focused on managing security vulnerabilities.
Observability remains a business imperative for forward-thinking business leaders. By mid-2026, 82% or more of respondents planned to deploy each of 17 different observability capabilities. Most organizations could have strong observability practices in place within three years, highlighting the industry’s growth potential.
49% said an increased focus on security is driving the need for observability, followed by integrating business applications into workflows and adopting AI technologies.
The focus on security reflects the rise of cybersecurity threats and complex cloud-native application architectures that introduce additional risks. For OpenTelemetry, scalability (52%) and the fact that it integrates with their existing tool stack (46%) drove its adoption, indicating that OpenTelemetry is a movement that vendors need to embrace to respond to customer requests.
