Like a lot of people who head up sales organizations, I get a lot of unsolicited emails that offer me many different tools that help our company improve its “batting average” in the sales process.  For the most part, I delete them, but one particular note that I received lately caught my attention.  The note contained a report from the Aberdeen Group and it spoke about something I have been preaching for a long time.....the need to provide redundancy to your key data-centers.  For a long time, forward-thinking companies have been using cellular technology to provide a fully redundant method of providing an IP-based connection to their key network access points, such as email servers and customer database records.  For most of the time, these devices are not used (as the main connection is up) but companies felt the relatively modest cost of a modem (and on-going airtime costs) was justified enough to deploy them across all of their sites.  What was staggering to me, after reading this report, was just how costly downtime can really be.

To be clear, M2M solutions provide a backup connection, and do not protect businesses in the case of the many possible reasons for a large scale failure, such as:

  • Large-scale interruptions to power sources
  • The closure of a center due to a forced evacuation (fire, natural disaster, etc), although cellular connections do allow for a quick setup of IP-based connectivity at an alternative site
  • Vandalism/Employee caused damage.....again, cellular connections do protect in the event of damage caused to the main connection line (such as a line being cut)
  • Viruses and/or software issues
  • Server hardware failures

So, how expensive is downtime for key data centers?

The report breaks down companies into three different categories:

  • Best in class (this refers to the top 20% of companies, in terms of how often their center had experienced downtime and how fast they were able to bring all services back online after an outage)
  • Industry Average (These are the companies who ranked between 21% and 70%, based on the same criteria)
  • Laggards (Companies in the bottom 30%)

Here is the breakdown of how costly downtime is to each category of business per hour:

The report further breaks down the average annual cost of downtime, based on each category.  It is important to note that the “Best of the Best” reported virtually no losses due to downtime in the past 12 months.

Now, to be totally clear, I wanted to point out the following things:

  • M2M solutions can help mitigate SOME of the possible reasons for datacenter downtime, and not the ones mentioned early in this article.
  • Depending on the bandwidth requirements for the center, the center may see a decline in performance when using cellular connectivity.  The reason is that most data-centers use some sort of high-speed landline connection where even if the cellular networks that are available can match the speed provided by the landline, the landline networks may be faster due to the higher speeds being more available regularly and likely lower network latency
  • Based on the values involved in the charts, these are high traffic data centers that when they are down, there is a significantly widespread effect on most, if not all, of the company.  For a location that has several hundred locations, the actual downtime cost at one of their remote sites will not be nearly as costly.
  • Finally, these charts assume that companies do not have fully redundant locations for the same processing of information.  Many companies have more than one site, often spaced out significantly for disaster purposes, and each site has the capacity to “pick up the slack” during an outage.

For M2M sales professionals.....even showing these numbers (as incredible as they may be) may not be enough to convince an executive to move forward on an M2M backup solution.  This is namely for two reasons.....first, many of them might never have experienced a widespread outage, and as such, think that this solution is a form of “fear-mongering”.  Next, even if they are convinced that the solution may be warranted, much like Customer Service, during difficult economic times, many executives do not want to focus any resources on activities that do not directly boost sales.

It is important to mention some of the other benefits of what a redundant connection can bring and how it can protect your business:

  1. Maintain service levels   Last year, I ordered some items online from one of the big box stores, which I had planned on picking up at one of their retail locations.  It was a great idea, as they would go through the hassle of finding the correct SKU and hauling it up to the front cash for me.  The problem was that the store had an Internet outage and did not receive my order from the main office.  This can be a common issue for anyone who takes reservations/orders online (ranging from hospitality to restaurants to medical clinics).  Needless to say, they did not get my business.
  2. Maintain customer interaction level   Many years ago, I sold a significant amount of modems to a chain of convenience stores.    This sale took place relatively early on in the “Debit card craze” that we are in now, so I asked the store....”Most people have cash to purchase the relatively low cost of the items that they are buying, what is the driving factor for the backup solution?”  Their response was that while it did help to protect their revenue to a certain extent, they never wanted to put the customer in an awkward situation where they could not pay for their products due to an outage.  This solution provided a low cost way of improving their customer relations.
  3. SLA requirements   Another customer that I sold modems to a while back was in the business of performing Government registries (unlike in some jurisdictions, this region of the country used private companies to do things such as marriage licenses and renewing your driver’s license).    Their reasoning for using a backup solution was not to protect revenue (they had a monopoly on their particular region and often had large line-ups), but was rather to satisfy the required availability time that the Governmental agency demanded.  This would also apply to companies such as ATM/Kiosks, parking providers and anyone else who has to maintain a certain level of service that they are contracted to provide.