Finding the Cost of Poor Application or Network Performance
by Alec Pinkham Alec Pinkham on

We hear from prospects and customers a lot that they didn’t realize they could monitor their entire infrastructure. That infrastructure today is complicated: The mix of cloud providers, SaaS apps and remote offices, along with tech-savvy, distributed users, can be pretty daunting. It’s not surprising that monitoring it all seems hard—it’s a concept that doesn’t seem possible for many in IT. This world of cloud and SaaS is still new enough that IT is trying to figure out how to manage all these tools and users.

The problems that arise from all these applications and networks are mostly caught after the fact, when a user puts in ticket (or many tickets) with complaints of a slow app, WiFi issue or recurring issues with a regular application task. That’s when IT starts troubleshooting, which is sometimes successful. It’s often not successful though, especially with elusive ghost issues where it’s hard to find the root cause. And looking for the root cause after the issue has already occurred is like closing the barn door after the horse got out.

For IT and the business, these user issues aren’t just about annoyance. Network and app slowdowns can cost real money. Say you have a 300-person organization that relies on G Suite or Office 365. At an average hourly wage of $25 per user, every hour the users in your organization are unable to access an application costs you $7,500. This recent survey found that 98% of organizations say a single hour of downtime costs more than $100,000, and 33% of those enterprises reported that one hour of downtime costs their firms $1 million to $5 million.

What Performance Problems Cost Your Business

We used to worry mostly about downtime with applications. But applications are better engineered now, and slow performance is the bigger issue than downtime. It’s no longer just about availability—it’s also about performance. Applications and network often have performance slowdowns rather than outright outages. You’ll hear from users more often that their application is stuck on a task or loading for too long than that it’s not accessible at all. You’ll also likely hear about issues that come and go and that you can’t replicate that often manifest as vague “WiFi problems.”

This may seem rather nebulous to measure, but research specifically focused on Office 365 deployments found that 70% of businesses reported weekly latency issues using Office 365, and 69% reported bandwidth issues even after network upgrades. So much for SaaS taking pressure off your infrastructure.

Office 365 can bring network latency and bandwidth issues Source: Talkin' Cloud

So what do performance problems cost? If G Suite or Office 365 performs poorly for your organization, let’s say it takes 10% longer for each person to do each task. That’s a 10% degradation in performance. If each employee works 8 hours per day, you’re paying $200 per day per employee (based on that $25 hourly wage). With that 10% degradation, you’re effectively losing $20 per employee per day (and 48 minutes per day). At 300 employees, that’s $6,000 a day lost because a critical application isn’t performing the way it should be.

Over the course of a year, if you’re affected by slow performance for 10% of days, you’d see slow performance approximately 25 days per year (keeping it simple—this is based on 250 working days in a year). The productivity loss for your organization is $150,000—that’s the $6,000 per day, multiplied by those 25 days. Even if we’re more conservative and consider only 5 days per year with performance issues, you’re still looking at a $30,000 productivity loss (that’s the $6,000 a day times 5 days).

The Costs of Managing IT in the Dark

Of course, all of these numbers are theoretical. The reality is that most companies have no idea what the performance of their applications and networks are on an ongoing basis. Instead, most discussions of performance only appear during a firefight or outage. That means that finding the root cause may be an afterthought, if it’s considered at all—so problems will just keep happening.  

There are a lot more components in IT infrastructures today, so issues can pop up in a lot of different places. As a simple example, do you know whether your SaaS providers or ISPs actually met their contracted SLA numbers last year? One of the biggest challenges associated with working with a SaaS or cloud provider is that you may see a new type of finger pointing. It’s no longer “Is it the app or is it the network?” but rather, “Is it the ISP or is it the cloud provider?”

But because of the extensive network dependence of most modern applications, measuring performance requires the ability to see both application and network. That’s where AppNeta comes in—our performance monitoring product finds the root cause of issues in SaaS and web applications, along with public and cloud provider networks.

Filed Under: cloud computing, Performance Monitoring

Tags: application downtime , network outage , performance problems