Technology
As Black Friday — the global shopping phenomenon that falls day after Thanksgiving in the U.S. — approaches, businesses that rely on digital sales in any capacity should be looking at ways to secure their uptimes. Over the past decade, as online shopping has trumped in-store shopping in terms of sales and revenue, there has been an increase in the downing of websites on that particular day for a variety of reasons.
First, it follows that more e-commerce activity means more people online, which means more of a chance to overload a company’s servers. IT infrastructure security companies have made a business from highlighting the importance of securing one’s servers against the onslaught of online shoppers on Black Fridays. A huge increase in volume of traffic can bring down even well-reinforced websites. Businesses can do a number of things to at least plan for any downtime. Examining vulnerabilities in infrastructure particularly if a third party is at all involved on the IT side, creating a strategy to quickly address any outage, and trying to isolate potential issues ahead of time are some of the ways in which online companies can try to insure against big losses because of downtime.
Of course, cyber hacks can play a role in the downtime of any website or service, and no business, however big, can claim it is immune to cyber crime. Companies as big as Amazon have experienced hack-based downtime — something that comes at great cost to more than its e-commerce business. If Amazon Web Services is affected, that means that services like Netflix are also impacted. Now we’re talking about a heavy bill per hour of downtime.
One of the biggest concerns for companies during an outage is lost advertising. Reports estimate that earlier this year, during an outage, Facebook lost more than $1.7 million in advertising revenue for every hour both the website and app were not working ($28,333 a minute). Even if an outage lasts for 10 minutes, as occurred this fall, that is a significant expense.
Other reports including one from The Atlantic in late October calculate that when Facebook goes down, it loses $24,420 per minute. It’s impossible to calculate exactly how much a company as big as Facebook loses during an outage, but suffice it to say it is costly.
Various research over the years has tried to pinpoint what kind of costs are incurred from infrastructure failure, and from the U.S. government to private companies, the estimation across the board is a steep one. Earlier this year, AppDynamics issued research noting that Fortune 1000 companies average a total cost of unplanned application downtime per year at $1.25 billion to $2.5 billion. Other data analysts and technology research groups have estimated that the cost of data center downtime has increased significantly over the past few years; in 2013 the Ponemon Institute estimated that unplanned outages cost U.S. data centers more than $7,900 per minute — a 41% increase from what it was in 2010. Two years later, it is guaranteed to be in the quintuple digits.
The fact that businesses vary in infrastructure capacity, data center needs, runtime, and other variables, needs to be taken into consideration with all of these aforementioned figures. An inestimable cost lies in maintaining brand/reputation. Users will immediately defect to other websites -- especially on Black Friday -- for their shopping needs should, for example, Best Buy's website go down. While loyalties per se might not alter, downtime on prominent usage days or prime hours affects user opinion of a business. The irony lies in the fact that, as the instances of outages have increased over the years because of the increase in traffic, users expect more and more that e-commerce businesses should have their systems reinforced and ready to withstand such traffic. When the clock strikes 12am on November 27, we will see just how seriously some e-retailers have taken their infrastructure support.
