Next week marks the beginning of the fourth quarter and the start of the holiday shopping season. If you’re an ecommerce company, you’ve likely been preparing all year for the most profitable quarter yet. And still, every year we’re overwhelmed with reports of outages amongst the largest brands. Last year Target, Neiman Marcus, Playstation Network, and many other brands were knocked offline or suffered crippling latency during the Thanksgiving weekend.
With such high stakes, why are big named brands still breaking under the weight of the traffic? Once a site reaches maximum capacity, there are a few different things that can happen. In most cases, the site will slow to a crawl or worse case it can shut down completely.
Did you know? 51% of online shoppers in the US say that site slowness is the top reason they’d abandon a purchase. (Source)
The majority of these big brands have large networks in place to balance the traffic load across multiple servers. While this may work fine for most, enterprise level businesses require even more redundancy. In most cases, a company will come to the realization that the cost of the infrastructure they need to optimize traffic flow across the globe for millions of users every minute of the day can become very expensive very quickly.
Cost of the Cloud
This is where you start to weigh the cost of an outage or latency with the cost of the infrastructure and services necessary to prevent them. In an earlier blog post, we broke down the cost of cloud vs. in-house infrastructure for an average sized business.In our estimate, the cost of hosting for eight servers plus associated costs for running your own infrastructure would run you about $6,400 a month plus an initial $31,000 to install and light-up the servers. On the other hand, to migrate the same sized network to the cloud would cost about $10,000 a month with no upfront costs. These numbers may not be very polarizing yet, but when you take these figures and apply them to large-scale enterprises, you can see a clear winner immediately.
Many enterprises can afford to host their own infrastructure, but they choose not to because of the maintenance demands and limited scalability. If you host your own network, you have to be able to support the massive amounts of infrastructure necessary to handle the influx of holiday traffic – but all year round. Keep in mind holiday traffic can be double to ten-fold the usual amount. This method is extremely costly because resources are often never even used for the majority of the year.
Cloud networks offer the same infrastructure but hosted on a third party network that can scale dynamically with traffic flow. This means you only have to pay for the resources you are actually using.
What’s at Stake?
Now let’s compare those monthly estimates we extrapolated earlier to the cost of an outage. You can deduce this yourself for your own brand by taking your annual revenue divided by 8,670 hours in a year. If your company earned twenty million last year, then you run the risk of losing $2,283 for every hour your site is down. Now let’s say you earned half of your revenue in the fourth quarter alone, then you’re looking at losing $4,566 an hour.
At what point do you stop risking your revenue and start investing in better, more scalable infrastructure?
Did you know? A two-second delay in load time during a transaction results in abandonment rates of up to 87%. (Source)
No More Excuses
Most companies blame misallocation of resources, as in they spend more time reeling in customers with marketing and advertising, and fail to set aside enough for their networks. However, advances in cloud technology have made the process of expanding and optimizing networks easier and more affordable. So affordable, that even small business users can have enterprise quality networks.
There is no longer an excuse for outages or latency during peak traffic times. The clear answer is migrating to a cloud-hosted network, or implementing a hybrid cloud system.
This holiday season, DNS Made Easy is dedicated to educating clients about the benefits of cloud-hosted networks and will continue to teach clients new ways to increase redundancy.