April 2014

# How to Calculate the Cost of Network Downtime?

Posted by vinod.mohan Apr 21, 2014

It has almost become a phobia in the IT department – network downtime or outage. Regardless of how much ever IT strives to keep the network up and running, there are many reasons due to which unscheduled network downtime keeps happening from time to time. So, what could network admins do to keep this menace under control? You might as well know the answer to this one: proactively monitor the network availability and performance problems. But for those of you that do not think network monitoring could help you reduce network outages, this blog will help put the impact of downtime into perspective so that you understand the larger picture of what all losses you may potentially face if you are not properly paying heed to the performance of your network infrastructure.

UNDERSTANDING AVAILABILITY

As much as you would wish to keep your network up 24/7, 365 days of the year, it is only theoretically possible as there are bound to be network outages some time, somewhere for some reason. It turns out, 99% availability, as good as it sounds, means 3.65 days of downtime per year, or 7.2 hours a month, or 1.68 hours a week. It doesn’t seem so good now, does it?

Look at this chart (source: Wikipedia) to understand how much of availability your network meets and how much you think is enough. And 99% is just not!

THE COST OF DOWNTIME

Consider five key factors to calculate the cost of downtime on your business.

#1 Productivity Lost

This is calculated in value worth of employee expenditure lost due to non-productivity.

• Direct productivity – This amounts to the direct expenditure loss per person due to non-productivity during the outage period times the number of workers impacted

Direct productivity (\$\$\$) = Number of people * Number of hours of lost productivity * Estimated productivity loss/person/hour

• Indirect productivity – There may be some teams and resources dependent on the directly affected lot, and their productivity will go down as a result of the former case. For, e.g., a 5 member team is not able complete their job in time, or are over-burdened with the work of the directly impacted team.

Indirect Productivity (\$\$\$) = Number of people * Number of hours of work * Percentage of lost productivity * Estimated productivity loss/person/hour

Count in the employees working in shift if you are running a 24/7 production business. If it’s a 24-hour outage and you run 3 employee shifts of 8 hours per day, then there will be 3 times the loss of productivity

#2 Profit Loss

This is the actual profit your business would have made during the outage period, if the network and systems had been up and running. If you are running a website or e-commerce business, every hour of website downtime means loss in profits. This can be categorized as lost sales or deferred sales. Both can happen during service downtime.

This is calculated as follows:

Profit Loss due to Lost Sales (\$\$\$) = Number of sales deals lost/hour * Average value of the sales deal * Number of hours of downtime

If it is a deferred sale, then it impacts your cash flow and in-quarter profitability and the loss of interest number the deferred amount by the number of days deferred.

#3 Cost of Penalty

If you are a service-based business, then your hours of downtime may impose a financial penalty for the non-productive hours. And if there’s going to be a compliance mandate tied to critical system availability dependent on the network, then factor in the penalty for non-compliance.

#4 Cost of Repair

This totally depends on your business continuity plans and disaster recovery strategy. If you have implemented the infrastructure for backup network lines, failover routers, etc., you should factor in the cost of procurement and usage during the outage period. If there is no recovery strategy, then you will incur the cost of repair from third-party including technical personnel expenditure, cost of hardware repair and replacement if required.

#5 Cost of Reputation & Loyalty

Though this may not be an immediate impact, your prospective customers may tend to lose trust in your organization and brand and may switchover to other competitors. This creates a huge reputational impact on your company and you have to invest money into rebuilding your brand, reinstating trust, and winning back your loyal customers.

FACE THE FACTS

• Downtime Cost Per Year: Companies experience an average of 501 hours of network downtime every year, and the overall downtime costs an average of 3.6% of annual revenue [Source: The Costs of Enterprise Downtime, Infonetics Research]
• Downtime Per Week: According to Dunn & Bradstreet, 59% of Fortune 500 companies experience a minimum of 1.6 hours of downtime per week. Assuming that an average Fortune 500 company has 10,000 employees who are paid an average of \$56 per hour, including benefits (\$40 per hour salary + \$16 per hour in benefits). Just the labor component of downtime costs for such a company would be \$896,000 weekly, which translates into more than \$46 million per year.
• Downtime Per Hour: Gartner estimated the hourly cost of network downtime for large corporations was \$42,000, with a typical business experiencing an average of 87 hours of downtime a year, resulting in total losses exceeding \$3.6 million.
• Downtime Cost Per Minute: According to a Ponemon Institute study, the average cost of data center downtime across industries is approximately \$7,900 per minute

PROACTIVE NETWORK MONITORING

Overall, the cost of network downtime is certainly colossal and can be avoided if network teams follow the adage ‘prevention is better than cure.’ Continuous and proactive network monitoring can help you easily detect performance problems leading to network outages. When you have identified network issues at early stages, you can take informed decisions and fix them before they build up into the detrimental downtime.

# Reduce Time Spent Managing Email

Posted by jkuvlesk Apr 9, 2014

Of the organizations surveyed (in the SolarWinds Email Management Survey, March 2014), over 80% are using Microsoft Exchange for their corporate email.  17% of the companies using Exchange have started moving to the cloud and are also using Office 365.  For organizations that have not or have no plans to move to the cloud, there are significant resources devoted to managing this application.  SolarWinds listened to our customers and built a solution to help admins improve Exchange uptime while reducing time to manage Exchange performance.  The latest release of Server & Application Monitor, v6.1, provides the following capabilities for Exchange 2010 & 2013 environments.

• Consolidated visibility to historical mailbox database usage (all copies), regardless of multiple DAG transitions
• Replication status checks
• Quick views of dormant mailboxes and top mailbox offenders and drill into individual Exchange user mailbox details for troubleshooting
• Real-time view of logs, processes, services
• Monitor the end-user experience to discover patterns that might lead to poor service with round trip tests (MAPI, etc.).
• Proactive alerting for related applications to include Lync®, ActiveSync® connectivity, and Active Directory® performance.
• Server hardware health & virtual server performance for multiple vendors
• Agentless – quick time to deploy and maintain

The benefits of having a single view of Exchange performance include:

1. Better customer satisfaction.  When the help desk is informed of problems in the application, they can better respond to end users and say, “yes, the problem is in XYZ component and we are working to resolve the problem now.”  Help desk admins can also more quickly assist end users because they have all the relevant information at their fingertips to assist end users in reducing their mailbox size (# of attachments, size of attachments, synced devices, sent/received mail).
2. Faster time to resolve messaging issues.  I spoke to a lot of Exchange admins last week at MEC.  Many were not only responsible for Exchange, but for related applications like Active Directory, Lync, and Active Sync.  About one-third of admins we spoke to said their Exchange environment was virtualized, so it was important to understand VM performance too.  Most of these admins were using PowerShell scripts to identify and troubleshoot performance issues.  This feedback was in line with our Email Management Survey which revealed admins commonly use multiple tools to manage email to include logs, Windows task manager, WMI and EMC/EMS with PowerShell.

In speaking with some of our customers, they expect to reduce time managing Exchange by 50% with these new features of Server & Application Monitor.  I encourage you to try it out for yourself!

# Is the time and effort required to manage email too expensive?

Posted by jkuvlesk Apr 9, 2014

Email is an application that is vital to business operations.  It’s been around a while and it’s not going away.  Despite email being one of the most important applications in the enterprise, there has been little innovation (with the exceptions of DAGs and SaaS/hosted solutions) to improve the efficiency and effectiveness of email availability—even as factors contributing to email management complexity have increased.

Is email really that hard to manage?

SolarWinds conducted an Email Management Survey (ending in March 2014) of 162 US and Canadian IT professionals with email management responsibilities.  The survey found that on average, 46% of companies have more than 2 FTEs (full time equivalents) dedicated to managing email.  In organizations with greater than 5,000 mailboxes, 49% employ 6 or more FTEs to manage email.  In addition, the survey found that 53% of time spent managing email is related to monitoring the email application.  For large organizations, that is a lot of people devoted to identifying and responding to problems related to a single process.  Financially speaking, 3 or more FTEs translates from a few to several hundred thousand dollars a year that could be spent on other IT projects that focus on the company’s competitive advantage.

Why is email so hard to manage?

Managing email is complex for several reasons. For example,  according to the survey, the prevalence of smart devices has increased the load on email services.  Respondents also believe that BYOx and mobility initiatives (like telecommuters) contribute to the complexity of email management.

In addition, administrators are more often using multiple tools to manage email applications. The survey revealed that 53% of respondents use 3 or more tools to manage email.  Many of these tools require scripting and assimilation of outputs into meaningful views using spreadsheets or PowerPoint charts.

What are companies doing to reduce email management complexity?

SaaS providers and application hosting providers are attractive alternatives to on-premise application environments because cloud providers take on and hide much of the complexity. Today, the majority of organizations surveyed (74%) have not transitioned to cloud technology. However, 37% of respondents believe that within 3 years, their organization will transition to a SaaS-based application, and another 22% believe their company will make the move in the next 5 years.

What can organizations do in the meantime to reduce the amount of time and money spent managing email?

Check out the SolarWinds Email Management Survey presentation on slideshare.

# GLOBAL IT SPENDING IS INCREASING IN 2014! SO, WHAT’S IN IT FOR YOU?

Posted by vinod.mohan Apr 4, 2014

The short answer, before we go into the stats and other reasoning stuff, is “a lot!” There’s very much for you in it with your increasing IT spend if you do it right, and if you do it in time.

The recent Gartner® Worldwide IT Spending Forecast has reported that global IT spending in increasing in various areas of IT. The role of IT in enabling business is being felt more and more, and top decision makers in organizations are coming to understand the value in IT investment more than they did last year.

THE SPEND TREND

Gartner states, worldwide IT spending is on pace to total \$3.8 trillion in 2014, a 3.2 percent increase from 2013. While this spans across multiple IT areas, it’s interesting to see the growth rate for spending on enterprise software which is on pace to total \$320 billion, a 6.9 percent increase from 2013.

While this is all positive outlook for 2014, the decision makers who are reading these numbers may wonder what they are going to get for spending more. Actually a lot! IT has evolved through the years from being a mere business accessory to an essential business enabler, contributor, and the need of the hour for business growth. Enterprise software has redefined how business functions operate adding more agility, scale, global connect and process automation. For those of you who understand only numbers – ROI in terms of cost and time savings. When you know what technology is suited for your business, and what short-term and long-term plans you have to implement the technology and sustain it, you would have mastered the strategy of output-driven IT spending. Even if you did decide to invest more in IT enablement, what should you be spending on? Selecting vital IT services is important.

IT infrastructure management is a key area of IT that has become inevitable in any network and data center environment. When you have network hardware, storage systems, servers and applications, there are bound to be failures and errors which only impact business continuity. IT management helps you get ahead of the issues, monitor your infrastructure proactively, and gives you visibility and control to fix the issues and eliminate the business impact. And also giving you the easy means to automate and simplify the way you do IT – delivering more operational efficiency and less manual overhead in problem-solving and fixing things.

IT infrastructure management does both:

• Monitoring and alerting on infrastructure problems
• Automating and troubleshooting infrastructure problems

Infrastructure management spans across various areas of IT including the network, servers and systems environment, storage and virtualized architecture, the security layer, and services for end-user IT support. Choosing to spend the wise way, when in the time of need, will help you gain quicker results of your IT investment.

HOW TO MAKE SURE YOUR IT SPENDING IS GOING TO BE WORTHWHILE?

• Understand your requirement well and choose the right IT management technology for your infrastructure
• Determine whether the solution is going to scale according to your growing infrastructure needs
• Evaluate various automation and simplicity options that IT management solutions can offer you
• Figure out how the ROI from your investment is going to come – problem-solving, failure detection, threat prevention, time savings, etc.
• Ensure you don’t get into vendor lock-in or in a money pit with single-vendor solutions
• Let the real end-users of IT management solutions, the IT guys – network admins and system admins – have a say in what you want to implement

It’s not about how much you spend to go with the spending trend. It about how wisely you spend on IT services in order to reap the full benefits of your investment while growing your business.