What does downtime cost and how to avoid it

 

I love to read. One of my favorite authors is Malcom Gladwell who is renowned for explaining human nature and why we behave the way we do and why we make decisions. However, when it comes to phone services, it seems as if so many people make decisions based on a few narrow factors. Price, the charm of the salesperson and the inertia of staying with a current provider seem to be the qualities most common to business clients staying with a poor performing hosted voice provider. I read their horror stories – when the primary motive was saving money or they did a “plug and play” install – which turned out to be “plug and pray“.

In order to find out what is happening in real time to those people that make poor decisions, I went to www.downdetector.com. It is an interesting website where you can see outages from a variety of providers in real time. You can see maps of where outages are occurring and you can also read comments from people posting throughout the outages. It was astounding to see the comments and the shear misery of the downed businesses.

How much does misery cost? A simple method to calculate the cost of an outage is: what is the amount of fixed monthly expense you have per hour for the people that are most affected by the outage and cannot do their job. For example, if I have a call center taking inbound sales calls with seven agents and I am paying the agents each $12.00 per hour, my fixed direct cost is $84. An outage of 4 hours costs me $ 84 x 4= $336.  That is the lowest estimate of what that four hour outage cost – speak to your accountant on how your indirect costs will increase your cost (for most businesses) to almost double that amount. If I factor in the cost of lost business- people that were trying to reach me during those four down hours, my costs are further increased due to the lost revenue.

If I look at the heat map of the outages on downdetector.com, I see that I live in a sea of red for my Internet service provider- the worst place to be. How can I mitigate the costs of an outage? As my father has taught me, the best way out of a critical situation is never to be in one.

Technology is supposed to help us. Right? Well, that is why we have the latest and greatest development called SD WAN (software defined wide area network). The best way to make sure that your provider doesn’t go down is to make sure that you have multiple providers and multiple ways of reaching the Internet. That is the rationale behind SD-WAN. Basically, it means that you have a device on your premise that enables you to plug in multiple connections to the Internet into one device to make one big connection to the Internet. When service is not down due to an outage, you are able to aggregate your services. When service on one of the component connections is down, the SD WAN provider routes all of your traffic to the other connections. So if I have a cable modem, a fiber connection and a wireless LTE connection, the probability of all of them going down simultaneously is virtually null. If I couple that with a hosted service that is housed in a Level III data center and a portal that allows me to route incoming calls to other devices or locations, I have eliminated the chance of an outage.

If you look at 99% reliability, that means approximately 20 hours of down time a year. Even 99.9 % reliability can cost 2 hours of downtime. You can’t choose when that downtime is going to happen. It can happen at a low impact time – or it can happen at the worst possible moment.

Lessons Learned:

  • Go onto downdetector.com and see if there are lots of outages with your provider
  • If you want to avoid the risk of downtime, diversify your bandwidth
  • Make sure that your cloud phone provider is housed in the best possible data center
  • Make sure your cloud phone provider is completely virtualized with redundancy.
  • Make sure that you have access to a portal and know how to re-route your calls immediately.
  • Make sure that you use SD WAN as part of your total solution.