New Relic Report Shows Outages Cost Energy and Utilities Providers Over $34 Million Per Year

SAN FRANCISCO - June 18, 2024

New Relic, the all-in-one observability platform for every engineer, published its State of Observability for Energy and Utilities report, which offers insights and analysis on the adoption and business value of observability for the energy and utilities industry. The report is based on insights from 132 technology professionals and was developed in association with the 2023 Observability Forecast. The report findings show energy and utilities organizations are investing in observability, particularly AIOps and mobile monitoring, to create real-time insights into their infrastructure and reduce outage costs and frequency.

The report highlights the importance of implementing observability, with 66% saying their organization receives $1 million or more in total value from their observability investment per year-more than any other industry. Based on annual spend and annual value received estimates, energy and utilities organizations receive nearly a 3x median annual return on investment (ROI). The report findings also show that the energy and utilities sector see observability as integral to their business, with 50% of IT decision-makers noting that observability helps them establish a technology strategy.

"Nobody wants their lights to go out without warning. This means that uptime and reliability is a top priority for energy and utilities providers," said New Relic Chief Design and Strategy Officer Peter Pezaris. "Implementing and maturing their observability practice offers a path forward for energy and utilities providers, creating greater visibility and faster time to resolution."

AI adoption is on the rise

The powerful combination of observability and AI can support organizations to create a greater understanding of telemetry data and address the challenges associated with ever-expanding data sets. More than half (56%) of respondents from energy and utilities organizations reported having deployed AIOps capabilities, including anomaly detection, incident intelligence, and root cause analysis, with 89% planning to have AIOps deployed by mid-2026. AIOps can support energy and utilities organizations by contributing to operational efficiency and enabling faster response times. It helps teams gather actionable insights and supports decision-makers to uncover learnings regarding system performance; improving incident detection and resolution.

Full-stack observability is key to outage reduction

Energy and utilities organizations experienced outages at a higher rate than all other industries, with 40% experiencing high-business-impact outages at least once a week, compared to the average of 32%. The median annual downtime for energy/utilities organizations was 37 hours, which is the highest by a considerable margin across all industries and 61% higher than the overall average of 23 hours. This downtime significantly impacts the bottom line for energy and utilities providers, with the median annual outage cost sitting at $34.31 million-the highest figure compared to all other industries.

The energy and utilities organizations that achieved full-stack observability saw substantial improvements to mean time to resolution (MTTR), which can support the reduction of outage costs. Some 87% of those with full-stack observability said MTTR improved to some degree since adopting observability, compared to 76% of respondents without full-stack observability. Additionally, while the proportion of energy/utilities respondents using a single tool has increased since last year, growing from 2% to 3%, the average number of tools has remained unchanged at six tools year-over-year. This indicates that providers are spending significant time and money tool-hopping to better understand the different aspects of their business and to resolve issues that lead to costly outages and poor customer experiences.

Security is the most widely deployed capability

Energy and utilities providers are prominent targets for cyberattacks, which underscores the importance of performant network, security, and infrastructure monitoring. Security monitoring was the most widely deployed capability for energy and utilities organizations at 68%, and by mid-2026, nearly all (99%) respondents expected to have deployed security monitoring. Furthermore, the top technology strategy or trend driving the need for observability amongst energy/utilities organizations was an increased focus on security, governance, risk, and compliance (44%).

For more information, view the State of Observability for Energy and Utilities report.

Customer spotlight

A leader in the global energy industry, World Kinect looked to New Relic to create greater visibility into the health of its infrastructure and applications. Thanks to the partnership, its engineering team has cut downtime, reduced troubleshooting time by 75%, and is able to resolve issues faster. For more information, read the Kinect case study.

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