Network outages cost US firms up to USD $5 million a year
Over a quarter of global and US businesses are experiencing annual revenue losses of up to USD $5 million due to network outages or poor performance, according to findings from an IDC InfoBrief commissioned by Expereo.
The report, "Enterprise Horizons 2025: Technology Leaders Priorities: Achieving Digital Agility," highlights the broad financial and operational impact network failures are having on businesses. An additional 22% of polled organisations reported losses exceeding USD $5 million, underscoring the escalating costs associated with network instability.
High-profile outages trigger reassessment
A succession of high-profile IT outages over the last year has prompted significant changes in technology strategies across US businesses. The study found that over half (51%) of US companies have re-evaluated their technology infrastructure as a direct response to these disruptions, which have ranged from cybersecurity breaches to connectivity failures.
The same research identified that 42% of US technology leaders say these incidents have brought cybersecurity higher up the C-suite agenda. Networking and connectivity are not far behind, with 40% of respondents stating these areas are now a focal point at the executive level.
Investment priorities shift
For US businesses, investment in networking and connectivity (40%) is now only slightly behind AI and data analytics (41%), according to the report. This priority shift demonstrates a growing recognition that reliable network performance is fundamental to the successful deployment of advanced AI solutions and other digital technologies.
Despite the rising number of cybersecurity incidents, poor networking continues to place high on the agenda for US technology decision-makers. The research highlights that 26% of US businesses believe inadequate network and connectivity performance is a threat to their future growth plans.
The challenges are amplified as businesses pursue large-scale data and AI projects. More US organisations (42%) report that network limitations are constraining their ability to support these initiatives, up from 21% the previous year. Only 7% of US companies say their networks are fully prepared to support AI without issues related to bandwidth, responsiveness, or latency.
Security remains a concern, with 20% of US businesses reporting they have experienced incidents linked to their AI usage. As a result, 30% of US technology leaders identify network and connectivity as urgent areas for improvement to support new digital investment.
"To drive a sustainable competitive advantage, connectivity is no longer an IT concern – it's a strategic business imperative. This research confirms what many technology leaders are already experiencing firsthand: connectivity is now the backbone of business. As organisations race to adopt new AI solutions, the C-suite must treat network performance with the same urgency as cybersecurity and AI itself, because without it, businesses simply cannot succeed," said Ben Elms, Chief Executive Officer of Expereo.
Addressing the skills gap
The research also points to ongoing challenges in recruiting and retaining the specialist talent needed to build and maintain robust network infrastructures. Cybersecurity is the most acute skills shortage, affecting 46% of US businesses, followed by networking at 38%.
Due to these constraints, 51% of US firms are considering an increased reliance on external partners, such as vendors and managed service providers, to address the networking skills gap. This trend highlights the demand for managed network services and external expertise to navigate the complexities of digital transformation and ongoing infrastructure management.
