April 13, 2016

The Ripple Effect Of Outages And Downtime Cannot Be Underestimated

By Jeremy Daniel

Outages and Downtime

CDN Performance Series Provided By Dyn

The Internet is the front door to commerce in today’s always-on, global environment. An Internet Performance issue such as an outage, or severe lack of functionality from an online presence sets off a chain reaction of negativity that reverberates throughout an organization. Now, more than ever, it is crucial for companies to effectively manage their Internet Infrastructure ensuring customers, employees and online partners have access at all times.

When Apple experienced an 11-hour outage in March of 2015, few could have predicted that event would end up costing the tech giant in the range of around US$25-million. Apple is one of only a few companies that would suffer such a massive revenue loss over that period of time, yet studies by the Aberdeen Group have confirmed that even one hour of downtime can cost successful businesses in the region of US$163,000, while in large organizations that figure reaches as high as US$680,000.

Of course, it’s not just a loss of direct revenue that is a consequence of downtime. Reputation and customer loyalty suffers dramatically. The Boston Consulting Group reports that over a quarter of users (28%) never return to a company’s web site if it doesn’t perform sufficiently well. Furthermore that loss of faith can permeate beyond the online world, as “a further 6% do not even go to the affiliated retail store anymore”, following an outage. And these are not customers who keep their disgruntlement to themselves. They have been shown to relate their negative experiences with a brand to at least 17 other people.

Competitive Factors

The bad news doesn’t stop there. Jupiter Research reports that just under half of site users who experience an outage will begin a relationship with a competitor, which can result in the possibility of losing their business permanently. When you factor in the knowledge that it costs three to five times more in marketing spend to acquire a new customer than it does to retain one, then you begin to see how an outage can have a devastating ripple effect on an organization.

competitor

While many assume that most outages are out of their control, or malicious in nature, according to an article written by Gartner, “the undisputed #1 cause of network outages is human error, with estimates as high as 32% according to Dimension Data’s 2014 Network Barometer report”. In other words, most outages are avoidable.

Organizations need to understand that customers don’t blame ‘the Internet’ for an outage, they blame the company itself. In the minds of the consumers, online brands are responsible for their availability and for delivering always-on services. The Internet is invisible and cannot be blamed, but the retailer suffering problems is an easy target for disgruntled consumers. Fortunately for these retailers, the advent of Internet Performance Management means, for the first time in the history of computing, they can have visibility and control of the public Internet. If you don’t take advantage of these new tools it will translate to the bottom line, as explained by The Downtime Survival Guide infographic; “If consumers anticipate problems every time they visit your website, they’ll be less likely to trust their hard-earned cash with you.” 

Proactive Performance Management

Outages can happen to anyone at any time, no matter how big or influential your business is. The key to managing an outage is to have the right continuity plan in place so that your response can be automatic, rapid and seamless for consumers. Dyn, an Internet Performance Management company, believes in proactive performance management and has a concrete method for dealing with outages, which includes accurate, comprehensive and timely monitoring as well as end-to-end routing accuracy. The company has developed an easy-to-implement cloud service that monitors important routes to and from cloud, CDN and datacenter locations.

An outage may well be an IT responsibility, but in today’s environment, it is perceived as an indictment of the brand as a whole. Consumers simply have too much choice and flexibility to be understanding of prolonged outages online, which is all the more reason for companies to invest heavily in managing their processes if and when outages do occur.

By Jeremy Daniel

Jeremy Daniel

Jeremy Daniel is an author, online marketing strategist and a firm believer in the transformative power of mobile technology for emerging markets. Jeremy has written across various media platforms since 2001, from television to advertising to print, and spends most of his time in the beautiful city of Cape Town, South Africa.
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