The Economics of Network Downtime
Infonetics Research recently released a study that claims businesses (just in North America alone) lose as much as $100 million a year due to network downtime. Let us dissect that into numbers you and I can relate to.
- On average, businesses suffer from 14 (CA Technologies) to 87 hours (Gartner) of downtime per year.
- A conservative estimate pegs the hourly cost of network downtime at $42,000 (Gartner).
- The cost of unplanned downtime per minute is between $5,600 and $11,000 (Ponemon Institute).
- MTTR (mean time to resolution) per outage, on average, is 200 minutes (ITT Process Institute).
For a quick/rough calculation of your own potential revenue lost, use this equation provided by North American International Systems (NASI).
LOST REVENUE = (GR/TH) x I x H
GR = gross yearly revenue
TH = total yearly business hours
I = percentage impact
H = number of hours of outage
Service costs are rarely zero.
Most businesses associate network downtime with major events or security breaches, but such isn’t always the case. Their own employees could induce it too. For many, that was the case every September. This blog is not about a challenge, but a growth hacking opportunity (transformed from an IT challenge).
Come September, Apple Fans Rejoice.
Every year, Apple fans like myself, anticipate and rejoice in the new features and products Apple introduces at its annual keynote event. This year was no different with the iOS 9 release. However, upgrading five iOS devices (three iPhones, an iPad, and one iPad mini), each at 1.4GB, meant my home internet connection wasn’t the ideal choice. So, like many Apple users, I leveraged my corporate Wi-Fi to do the upgrade.
IT Apple Fans Rejoice, But Also Dread
The next business day, I brought in three iOS devices and started the upgrade simultaneously. I wasn’t the only one doing so. While waiting for the upgrade to finish, I then watched several Apple key feature videos and did a quick surf on social media for the latest on #iOS 9, which brought up these.
Hmm…One person with three devices, each consuming 1.4GB of bandwidth per upgrade. Do the math. It doesn’t take much to overwhelm even that 100 Mpbs line. Soon the iOS 9 beast (an influx of iOS 9 upgrades) could degrade application performance and potentially cause network downtime. As excited as IT could be about Apple’s new products and feature releases every September, I bet they also dread how the network will respond to the influx of traffic. Fortunately, I did not experience any application issues, nor was my corporate network down as a result of this. What’s our secret?
Superior App Experience
The secret is part of our Apple + Cisco partnership: our Application Experience solution a.k.a Cisco IWAN with Akamai Connect. With HTTP/S caching and application optimization technology, iOS 9 was cached locally in the branch. Instead of three redundant instances of 1.4GB of data, like in my scenario, it was one. (Did I mention my upgrade was lightning fast too?) As a result, network bandwidth was offloaded and through Quality of Services (QoS) business critical applications got prioritized for superior user experience.
To see a throughput summary for this iOS 9 use case as well as graphical comparisons for many more, for example, retail and education, check out the presentation: Accelerating Applications – iOS 9 Use Case in the Cisco Enterprise Networks community.
iOS – A Growth Hacking Opportunity for One Retailer
iOS features and products bring benefits not only to consumers, but also businesses. One world-renowned fashion brand outfitted many sales associates with iOS devices in its stores. At any given time, for example, at the point of sales/engagement with shoppers or at the customer service desk, associates could access product catalogs via an iOS device and complete the sales transaction locally at the kiosk. For training purposes, associates would use their iOS devices to access Intranet videos over the WAN during off peak time, maximizing both product knowledge and productivity. Now imagine the effect 10-15 company supplied iOS devices plus all of the personal iOS devices upgrading would have on the store’s network. During the week of the initial iOS 9 upgrade, this particular retailer was able to offload close to 5 TB of data off the store’s network while improving the performance of iOS downloads and the application experience for all in-store apps. (See Figure 1 below).
By embracing technology (i.e. iOS and Cisco IWAN with Akamai Connect) with a keen focus on growth rather than an IT problem, this retailer innovated its sales floor activities, increased customer engagement, and improved associate’s productivity. The result: higher sales per square foot.
Embrace iOS and Growth Hack Your Business
Opportunity doesn’t always come knocking. Sometimes, you have to go seek it out or transform a challenge into an opportunity. For many, every September is a time when IT dreads, but as seen in our retailer example, it’s a chance to growth hack the sales floor activities (this time) and maybe a new business model (next time). Learn more about Application Experience with the resources below and go growth hack your business.
I’d love to hear your experience, so do share (@annaduong).