Southeast Asia faces USD $165.5m IT outage cost as AI rises
A recent study from New Relic has revealed that businesses across Southeast Asia are facing median annual costs of up to USD $165.5 million due to high-impact IT outages, highlighting mounting challenges as AI and digital operations expand in the region.
The 2025 Observability Forecast, which surveyed more than 1,700 IT and engineering professionals across 23 countries, underscored the significant financial and operational impact caused by digital disruptions. For ASEAN countries-including Singapore, Thailand, Malaysia, and Indonesia-the cost of high-impact outages ranged between USD $1 million and USD $3 million per hour in lost revenue. The reported median annual cost for these outages in the region is USD $165.5 million, more than double the global median of USD $76 million.
Scale of the impact
Globally, the research identified the main causes of high-impact outages as network failure, third-party or cloud provider service disruption, and challenges associated with deploying software changes. In ASEAN, nearly half of organisations (46%) reported experiencing high-impact outages at least weekly, with 1% stating they faced such outages multiple times per day. Additionally, 32% indicated these outages cost between USD $1 million and USD $3 million per hour in lost revenue.
Beyond the direct financial implications, the study found that engineers worldwide are now spending a third (33%) of their time dealing with system disruptions or emergency incidents, diverting attention from ongoing project development.
Increased AI adoption and observability challenges
The rapid adoption of AI, particularly large language model-powered applications and agentic AI, has introduced new challenges in system visibility. Traditional monitoring tools are increasingly unable to address these issues, leading to silent faults that may persist undetected. The report noted a significant increase in AI monitoring usage within ASEAN, rising from 39% of organisations in 2024 to 83% in 2025-a year-on-year adoption jump that signals widespread deployment of AI technologies.
Most ASEAN organisations highlighted that this expansion of AI capabilities is driving increased demand for more comprehensive observability solutions to monitor and manage complex systems. "With the role of AI taking centre stage and outages proving to be exceptionally costly, the importance of a robust, intelligent observability strategy has never been more vital for Southeast Asian organisations," said Rob Newell, Senior Vice President and General Manager Asia Pacific at New Relic.
"While the broad adoption of key observability capabilities like AI monitoring is encouraging, it's clear that a lack of strategy, data and tool sprawl, and tech complexity are continuing to present significant challenges. Organisations that don't embrace intelligent observability will find themselves at a severe and costly disadvantage."
Barriers to effective observability
The report identified several continued barriers to the full adoption of observability platforms across Southeast Asia. The top challenge, as cited by 39% of respondents, was the lack of a clear organisational strategy. This was closely followed by the complexity of technology stacks (36%). Over a quarter (27%) pointed to the proliferation of tools or siloed data as a significant hurdle, with data sprawl also prevalent-24% of organisations reported using six or more telemetry data stores, the highest proportion in Asia Pacific.
Benefits and business outcomes
Despite these hurdles, ASEAN organisations reported notable returns from observability investments. Over two thirds (69%) saw improved AI readiness as a result, and 61% said observability platforms enabled data integration. Additional advantages included deeper cross-functional collaboration and enhanced decision-making, with 49% of respondents noting these as top business benefits. Half of executives and managers surveyed stated they gained a three- to five-fold return on investment from their observability platforms.
Trends in technology adoption
The study found that AI monitoring was the primary technological driver for observability, identified by 61% of ASEAN respondents, followed by integration of business applications into workflows (35%) and the adoption of IoT technologies (32%). By 2025, 83% of ASEAN organisations had deployed AI monitoring, with database monitoring (73%) and application performance monitoring (71%) also seeing strong uptake.
Integration of operational data is accelerating in the region, with plans rising sharply from 50% in 2024 to 85% in 2025. In Singapore, this trend was even more pronounced, with 92% of organisations intending to integrate operations data. The integration of production data was also on the rise, particularly in Indonesia, where 70% of respondents said observability had helped to connect previously siloed systems. Approximately half (49%) of ASEAN participants said observability improved collaboration between teams around software stack decisions.
The report, conducted in partnership with Enterprise Technology Research, surveyed a range of IT practitioners, executives, and managers, confirming that the landscape for digital services in Southeast Asia is being fundamentally reshaped by both the challenges and opportunities of AI and robust observability frameworks.
