Zero tolerance for downtime

From being organized around the flow of money, the economy is being organized around the flow of information

Peter Drucker  

rowing dependence on fast-paced electronic interaction -- has left little tolerance for downtime in computing environments. High-availability and pervasive computing, once considered a strategic advantage has become a tactical necessity for companies compelling them to maintain 99.999 per cent uptime According to the survey conducted by Find /SVP 450 of Fortune-1000 companies concluded that average outage across industries is four hours and the average annual measurable losses approximate $3 million. If you're doing business over the Web, the medium itself dictates the expectation for high availability and downtime could be a business killer. Failure isn't an option anymore and companies can't risk extended service interruptions without seriously denting their bottom line. Consider this:

• After being down for 22 hours in June of 1999, online auctioneer e-Bay reported revenue loss between US $3 million and US $5 million, its stocks dropped by 26 per cent.
• After being down for 24 hours in June 1996, AOL had to pay $3 million in customer rebates.
• In 1999 a software upgrade cost AT&T US $40 million in rebates.

A recent study conducted by Feedback Consulting of 325 Indian companies across eight major industry segments - Telecom, IT Services, ITES Services, ISPS, Banking and Financing Services and Manufacturing sectors - to quantify the cost of downtime in India reveals the awful truth about downtime loss suffered by Indian companies. The study concludes that India Incorporated could be losing over Rs 20,000 crore annually - approximately 2 per cent of the gross output of the total industrial and service sectors. IT service companies constitute five per cent of the loss; Telecom companies 2.7 per cent of the loss and ITES companies 0.8 per cent.

Most service outages and interruptions are attributable to inadequate power infrastructure and poor quality power. For IT service companies and the call center industry, 60 per cent of the companies interviewed for the study responded they had experienced power cuts more than once a month. Bangalore India's Silicon Valley topped the charts with 75 per cent of firms reporting they experienced power disruptions once a month. A mere two per cent of the companies from Bangalore enter the "NEVER" power disruption category as compared to Chennai's 4.1 per cent, Delhi's 4 per cent, Hyderabad's 21.5 per cent and Mumbai's 18.4 per cent. Apart from power outages networks would continue to be susceptible to viruses and hacker attacks. In India strikes, agitations and bundhs can also have a crippling impact on business.

With the power situation across India showing no signs of improvement, the way forward is to evolve a complete power quality situation that protects the facility and the instruments within from unwanted surges, power failures, excessive heating and humidity and other related environment quality solutions. Over 50 per cent of companies in Bangalore alone are dependant on the grid, DG as well as the UPS, rendering the city one of the most back up savvy measure States. But companies obviously need to take into account all factors that can cause outage and accordingly design uptime solutions.

Says Mr. Nihar Rao CTO Om Kotak Mahindra: "Eighty per cent of the companies put everything they have invested on continuity at risk because they are either unaware of final 20 per cent of the solution or are unwilling to pay for it. This is like having life insurance for 10 months of the year. In most cases, however, productivity losses and erosion of brand equity are incalculable Companies can't seem to quantify the cost of responding to incidents. As it's difficult to sort out all the pieces, companies need to plan for uptime solutions at the inception stage opt for a retrofit, "Rather than maximise uptime, most companies are in the minimise downtime mode, says V Ravichandar CEO, Feedback Consulting Services Private Limited. Also, if an application is down, one can assume that the outage only affects people who need the general ledger to do the job. But it can have an impact on the entire corporation if the system crashes on the day the company has to submit financials. Further imagine the impact if the CEO needs relevant information for a meeting with VCs." The true impact on employee productivity may be minimal but the actual cost impact to the company can be phenomenally high. " For instance, an India-based fruit juice processing plant, customer of Emerson Networks, with a capacity of 5,000 liters per hour was losing out Rs 7.56 million in profits on an expected PBT of Rs 18.51 million on account of unplanned downtime.

Most Indian companies, with the exception of ITES companies, sill lack an assessment methodology to define critical outage, identify mission critical applications and prepare an analysis framework to plan for redundancies and audit emergency response mechanism. Designing uptime necessitates redundancies at all levels servers, storage, networking equipment and connectivity links. The networking strategies must cover international communication links, country wide area network, last mile connectivity, metropolitan, area network and local area network, says Venkat Kedlaya, Managing Director Convergent Networks. While these may sound expensive, uptime costs are a fraction of network infrastructure costs. Says Gene Hayden Vice President Asia Pacific Emerson Network Power. "The uptime solution is a bundle of products and services that optimally transfer site conditions of power and environment into those required by the hardware. On an annual revenue of $300 million, network infrastructure investment $25 million and uptime products and solutions cost $500K."

Eighty-five per cent of companies are willing to invest in good quality uptime solutions, according to the Feedback Survey. In a connected economy where the competitor is less than a click away the top five critical factors for survival have been cited: image, industry growth, time to market and seamless business processes. This translates into uptime as outages impact the Top 5 survival factors in an increasing competitive global scenario.

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