Nearshore Americas
software failures

Financial Loss From Software Failures Reached $1.7 Trillion in 2017

Software failures affected 3.6 billion people in 2017, causing US$1.7 trillion in financial losses, with the retail and consumer technology sectors being the most affected, according to a study by Software testing company Tricentis.

“Today, software plays a larger part in consumer and business interactions than ever before, and, yet, the number of news stories of reports of bugs being released into production only continues to grow,” remarked Wolfgang Platz, Tricentis founder and CPO.

Even so, Platz said the trend will change in the coming months if businesses make better use of automation technologies and streamline their operations properly.

Both the overall total number of software failure stories in the news has grown, and far more failures were reported than in previous years.

Failures in services and utilities, and the entertainment industry, saw a three-year low in media coverage against their 2015 and 2016 rankings.

Failures in retail and consumer tech sectors were largely due to buggy smartphone updates and the exploits of security researchers or hackers, the report noted.

The public service and healthcare sectors were not affected much, but the number of reported failures was 10% higher in 2017 than in 2016.

There were countless stories of hacking and data theft, causing inconvenience for a large number of people and organizations. For example, there were many stories of people stranded in airports and stock prices crashing for some companies.

In August 2017, Provident Financial, a UK-based sub-prime loan company, lost £1.7 billion (US$ 2.4 billion) of its market value in just one day. The crash happened after the CEO of the company announced that the implementation of a new appointment scheduling application had malfunctioned so badly that only 57% of loan debts had been collected on time.

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The buggy software ultimately cost the company £120 million (US$170 million) in lost profits over the course of 2017, according to the Tricentis report.

Narayan Ammachchi

News Editor for Nearshore Americas, Narayan Ammachchi is a career journalist with a decade of experience in politics and international business. He works out of his base in the Indian Silicon City of Bangalore.

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