December 18, 2000, 3:09 PM —
NOBODY MISSES THE NETWORK -- UNTIL IT'S DOWN.When a corporate network crashes, its damaging ramifications often sweep across national headlines, wreaking havoc on the company's bottom line and throwing a fiery spotlight on its CIO.
Indeed, too often the blame for what is mechanical error is dumped on the CIO, the chief architect, who has to spin an explanation for why things went horribly wrong. Just ask Maynard Webb, former CIO at Gateway and now president of eBay Technologies. He's in charge of the network that drives the Silicon Valley-based online auction house.
Last year, before Webb's arrival, eBay experienced a 22-hour outage that deflated the company's market cap by $2.25 billion in a single day and pinched quarterly sales. "There are huge challenges facing any company growing as fast as us," says Webb, who was brought on board to ensure such debacles won't happen again. "We got a little behind the curve in our capacity and operational excellence."
eBay's infamous black eye is today's rallying cry for the importance of network uptime in an accelerated electronic world. Companies are spending exorbitant amounts of capital and manpower to strengthen their networks. Still, the potential for a network outage looms on the horizon like a deadly offshore hurricane. No network is safe from disaster; however, CIOs can learn a few tips from companies that have endured head-on collisions with network downtime, and thus improve their chances for survival.
Previously, CIOs relied on systems management tools from Tivoli Systems, Computer Associates International, Hewlett-Packard and others to safeguard their networks, but the stakes have changed with e-commerce. Suddenly, networks are wider and subject to more weak links. Network downtime is now immediately apparent to customers and business partners. The cost of network downtime has risen exponentially. And it's difficult to measure downtime's effects on sales, market branding, customer loyalty and
competition -- all moving targets in the new internet economy.
San Jose, Calif.-based market researcher Infonetics predicts U.S. corporations will spend $11.2 billion on network and systems management products in 2003, spurred by trends toward virtual private networks, network security and e-commerce.
The stakes are high for everyone, not just for eBay and the rest of the dotcoms. Infonetics surveyed companies with average annual revenues of $3 billion and found that they lost an average of $4 million annually because of local area network downtime. For wide area networks, companies reported an average annual loss of $3.3 million to downtime. (These figures primarily represent lost employee productivity and don't include losses due to customers being unable to access business services.)