{"id":343,"date":"2024-02-20T06:33:45","date_gmt":"2024-02-20T06:33:45","guid":{"rendered":"https:\/\/blog.spike.sh\/2024\/02\/20\/software-incidents-what-they-really-cost-you\/"},"modified":"2025-11-05T13:55:58","modified_gmt":"2025-11-05T08:25:58","slug":"software-incidents-what-they-really-cost-you","status":"publish","type":"post","link":"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/","title":{"rendered":"Software Incidents: What They REALLY Cost You"},"content":{"rendered":"\n<nav aria-label=\"Table of Contents\" class=\"wp-block-table-of-contents\"><ol><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#what-is-a-software-incident\">What is a Software Incident?<\/a><\/li><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#cost-of-software-incidents\">Cost of Software Incidents<\/a><\/li><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#5-real-world-software-incidents\">5 Real world software incidents<\/a><ol><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#1-facebook-outage\">1. Facebook Outage<\/a><\/li><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#2-equifax-data-breach\">2. Equifax Data Breach<\/a><\/li><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#3-atlassian-outage\">3. Atlassian Outage<\/a><\/li><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#4-cloudflare-outage\">4. Cloudflare Outage<\/a><\/li><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#5-google-server-outages\">5. Google Server Outages<\/a><\/li><\/ol><\/li><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#other-costs-of-software-incidents\">Other Costs of Software Incidents<\/a><\/li><li><a class=\"wp-block-table-of-contents__entry\" href=\"https:\/\/blog.spike.sh\/software-incidents-what-they-really-cost-you\/#spike-can-help-\">Spike Can Help!<\/a><\/li><\/ol><\/nav>\n\n\n\n<p class=\"wp-block-paragraph\">You\u2019re knee-deep in code, sipping your fourth cup of coffee, and suddenly, your app crashes! &nbsp;Your heart rate? Skyrocketing!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Before you realize what\u2019s happening, the money clock starts ticking and the cost per minute soars.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That\u2019s a software incident in action!<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"what-is-a-software-incident\">What is a Software Incident?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">A software incident is any unexpected event that disrupts the normal functioning of a software application or system.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">From downtime to data breaches, deployment failures to cybersecurity attacks, and application crashes to failures in payment gateways\u2014numerous software incidents occur within a business.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To know more about incidents, check out this <strong><a href=\"https:\/\/spike.sh\/blog\/what-is-an-incident\/\">blog post<\/a><\/strong>.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"cost-of-software-incidents\">Cost of Software Incidents<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Last year, <a href=\"https:\/\/www.it-cisq.org\/the-cost-of-poor-quality-software-in-the-us-a-2022-report\/\">CISQ<\/a> reported that poor software quality costs the US $2.41 trillion, with <strong>operational failures<\/strong> amounting to a staggering <strong>$1.81 trillion<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Let\u2019s spotlight one incident\u2014downtime.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>In 2014, the <a href=\"https:\/\/www.gartner.com\/en\/insights\">Gartner Report<\/a> stated over <strong>33%<\/strong> of enterprises lose <strong>$1-5 million<\/strong> for 1 hour of downtime.<\/li>\n\n\n\n<li><a href=\"https:\/\/www.axios.com\/2017\/12\/15\/amazon-outage-cost-sp-500-companies-150m-1513300728\">Axios<\/a> reported the 4-hour <a href=\"https:\/\/aws.amazon.com\/\">AWS<\/a> outage in 2017 resulted in losses of <strong>$150 million<\/strong> for S&amp;P 500 companies and <strong>$160 million<\/strong> for U.S. financial services firms.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Now, let\u2019s switch gears to another incident\u2014data breaches.<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>As of 2023, the <strong>global average cost per data breach<\/strong> amounted to <strong>$4.45 million<\/strong>, an increase from $4.35 million in the previous year.<\/li>\n\n\n\n<li>\u200b\u200bRemember <a href=\"https:\/\/www.csoonline.com\/article\/530792\/malware-cybercrime-worst-case-projected-cost-of-epsilon-breach-4b.html\">Epsilon&#8217;s epic incident<\/a> in 2011? They took a <strong>$4 billion <\/strong>hit from a data breach that affected up to 75 clients, including Best Buy, JPMorgan Chase, and Target.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"5-real-world-software-incidents\">5 Real world software incidents<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The following incidents will give a more detailed picture of how much software incidents can actually cost you. Get ready to be amazed!<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"1-facebook-outage\">1. Facebook Outage<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In 2020, <a href=\"https:\/\/www.facebook.com\/\">Facebook<\/a> had its worst-ever <a href=\"https:\/\/medium.com\/thousandeyes\/facebook-down-analysis-of-a-14-hour-outage-99ae47471189\">outage<\/a>, which lasted for at least 14 hours.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">A configuration change triggered a domino effect in its data centers, causing a global network meltdown.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The downtime also affected its products\u2014Instagram, Messenger, and WhatsApp.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Facebook lost <strong>~$6.3 million<\/strong> for every hour of downtime. The final tally? About <strong>$90 million<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The blackout left millions of users hanging and caused Facebook&#8217;s stock to drop <strong>2% <\/strong>in after-hours trading.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-us.googleusercontent.com\/OGtpo12HFhihrAYjOaJfDuN9WGTSlp8ozD3N3WUXtkhd2DGOIMC_HVUv-csoZSTah3A6XXwIMykKiwkxdhPyD9PwyQfLD-3bIG0wKK4WxLcUq7l2oqXxGtZbVW8qdcfxIOZMv_ey_1mzHOkUkSfbYrY\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Source: Google Finance<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"2-equifax-data-breach\">2. Equifax Data Breach<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In 2017, <a href=\"https:\/\/www.equifax.com\/\">Equifax<\/a>, an American multinational consumer credit reporting agency, fell victim to a massive data breach.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This breach exposed the personal and financial information of <strong>~147 million<\/strong> individuals, including sensitive data like social security numbers, birthdates, and driver&#8217;s license numbers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The breach even had its hands on credit card information from about <strong>209,000<\/strong> consumers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>The total loss? A jaw-dropping <a href=\"https:\/\/www.housingwire.com\/articles\/equifax-expects-to-pay-out-another-100-million-for-data-breach\/#:~:text=In%20total%2C%20the%20breach%20cost,million%20in%20cybersecurity%20insurance%20coverage.\">$1.7 billion<\/a>.<\/strong><\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Post-disclosure of the breach, Equifax&#8217;s share price dropped by <a href=\"https:\/\/www.marketwatch.com\/story\/equifaxs-stock-has-fallen-31-since-breach-disclosure-erasing-5-billion-in-market-cap-2017-09-14\">31%<\/a>.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-us.googleusercontent.com\/eg7ADRrbzY1Hh5aaqqG4fUICbiEWQ7MudpkCt6XVfyxDydDlndhmtcbYiu9WPnr29IAt5YPjGMw3YsFRPt4tsbkNNQzzFqF7EfNyZQS-dYDa3kpT3ZXSUkO-v95JIqcArktBrdCck0lzI9a5hcJVj_s\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Source: MarketWatch<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"3-atlassian-outage\">3. Atlassian Outage<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">In April 2022, <a href=\"https:\/\/www.atlassian.com\/\">Atlassian<\/a> had a major <a href=\"https:\/\/www.atlassian.com\/engineering\/post-incident-review-april-2022-outage\">outage<\/a> that lasted for 14 days. Jira, Confluence, Opsgenie, and other Atlassian products were unavailable for a subset of its customers.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The problem was triggered by a faulty application migration process. Engineers at Atlassian created a script to disable an outdated application, but due to communication problems between teams, the script accidentally disabled all Atlassian Cloud products.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To make matters worse, the script was apparently configured to permanently delete data rather than mark it for deletion. As a result, data in affected accounts was removed permanently from production environments.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">This led to the immediate deletion of <strong>883 sites<\/strong> representing <strong>775 customers<\/strong>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Prior to the outage, Atlassian&#8217;s share price was <strong>$305.75<\/strong>, but it plummeted to <strong>$245.29<\/strong> after the incident, resulting in a significant drop of <strong>~19.56%<\/strong>.<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-us.googleusercontent.com\/U_4ak3ikAxBSzEWAqNzd_AyGOtzmCxr9npwv_Tr3jVbLEnE6Nmf9z0Ap8YUEmknE9b34a65xSXJOOd7JpCkI4FD0wuRYcgUqA6cu9zfb1NsHQrMK0ridzyuH5qO6JqEefyAh97BdSblSTgwB1XERw9Y\" alt=\"\"\/><\/figure>\n\n\n\n<p class=\"wp-block-paragraph\">Prior to the outage. (Source: Google Finance)<\/p>\n\n\n\n<figure class=\"wp-block-image\"><img decoding=\"async\" src=\"https:\/\/lh7-us.googleusercontent.com\/3iRYfVGoOoaqDcfc5ryuovh6Juu1GLULHeRw9Z3wc_pYL6_CI_guyNFuGcBT5fafPlSyA2n_KuQD2tvDp36cEAFOSeozRt7fY5wzIG9mzYG4V5sQRAiEqoTqt2_h_xtm8kKpWhXEj6IhndRPJEI_qNY\" alt=\"\"\/><figcaption class=\"wp-element-caption\">post outage<\/figcaption><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"4-cloudflare-outage\">4. Cloudflare Outage<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">On June 21, 2022, <a href=\"https:\/\/www.cloudflare.com\/en-gb\/\">Cloudflare<\/a> suffered an <a href=\"https:\/\/blog.cloudflare.com\/cloudflare-outage-on-june-21-2022\/\">outage<\/a> that affected traffic in 19 data centers. These data centers handled a significant proportion of its global traffic.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Reason for the outage? Cloudflare was working on a project to increase resilience in its busiest locations. A change to the network configuration in those locations caused the outage.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Popular apps like Discord, Shopify, and Fitbit took a hit. Websites such as Udemy, Splunk, Quora, and Crunchyroll were affected. Downtime detectors that relied on Cloudflare were down too.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Despite only 5% of the Cloudflare network being directly affected, the consequences were disproportionately severe. A staggering <strong>50%<\/strong> of total requests worldwide encountered delays or denials of access.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The Ponemon Institute&#8217;s 2016 <a href=\"https:\/\/www.vertiv.com\/globalassets\/documents\/reports\/2016-cost-of-data-center-outages-11-11_51190_1.pdf\">report<\/a> estimated an average downtime cost of <strong>$9,000<\/strong> per minute. Given this figure, the companies that relied on Cloudflare could face losses in millions per hour during the outage.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\" id=\"5-google-server-outages\">5. Google Server Outages<\/h3>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"https:\/\/www.google.com\/\">\u200b\u200bGoogle<\/a> faced a series of <a href=\"https:\/\/en.wikipedia.org\/wiki\/Google_services_outages\">outages<\/a> in 2013, 2014, 2018, 2020, and 2022. In 2020 alone, it had three consecutive outages.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These outages affected key platforms such as Gmail, YouTube, Google+, Google Calendar, and various other Google services.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These interruptions had severe consequences, including disruptions in customer service and substantial financial losses for businesses that relied on Google&#8217;s services.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For instance, during one of these outages, it is estimated that Google incurred a staggering loss of approximately <a href=\"https:\/\/www.quora.com\/How-much-money-did-Google-lose-with-30-minutes-downtime-today\">$45.5 million<\/a> in just 2.5 hours of downtime. This financial setback undoubtedly affected numerous companies that depended on Google&#8217;s infrastructure and services.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"other-costs-of-software-incidents\">Other Costs of Software Incidents<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The costs of software incidents go beyond financial losses. They may include reputation damage, trust issues, regulatory fines, etc.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">To understand these undercover costs, let\u2019s again take the example of Equifax.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Equifax&#8217;s data breach left customers feeling vulnerable and violated, eroding trust in its ability to safeguard their data.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The breach occurred in July 2017, but Equifax didn&#8217;t publicly announce it until September 2017. This delay in notification led many customers to question the company&#8217;s transparency and accountability.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The breach generated a significant public outcry, leading to numerous lawsuits and regulatory investigations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Equifax shelled out <a href=\"https:\/\/www.housingwire.com\/articles\/equifax-expects-to-pay-out-another-100-million-for-data-breach\/#:~:text=In%20total%2C%20the%20breach%20cost,million%20in%20cybersecurity%20insurance%20coverage.\">$800 million<\/a> to settle various federal and state investigations.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">On top of that, the company spent an extra <strong>$337 million<\/strong> for technology and data security, legal and investigative fees, and product liability related to the breach.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"spike-can-help-\">Spike Can Help!<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">No doubt the costs of software incidents are staggering with both financial and non-financial burdens. But worry not, Spike has got your back!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">With a user-friendly and budget-friendly incident management system, Spike helps you tackle all software incidents like a pro!<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Sign up for a demo of Spike today: <a href=\"https:\/\/spike.sh\/demo\">https:\/\/spike.sh\/demo<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Last year, CISQ reported that poor software quality costs the US $2.41 trillion, with operational failures amounting to a staggering $1.81 trillion.<\/p>\n","protected":false},"author":263547072,"featured_media":678,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_crdt_document":"","_import_markdown_pro_load_document_selector":0,"_import_markdown_pro_submit_text_textarea":"","_lmt_disableupdate":"","_lmt_disable":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_wpas_customize_per_network":false,"jetpack_post_was_ever_published":false},"categories":[1428],"tags":[1400,1385],"class_list":["post-343","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-incident-management","tag-analysis","tag-incidents"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Software Incidents: What They REALLY Cost You<\/title>\n<meta name=\"description\" content=\"Discover the true cost of incidents with real-world examples. 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