* Just how damaging are application performance problems?
Ever wonder just how much of an impact poor application performance has on a company’s bottom line? Ipanema Technologies commissioned a survey to try to come up with an estimate. The survey — which polled businesses in the U.K. — found application performance problems can cost enterprises $1 million per year due mainly to reduced productivity, lost sales and diminished customer confidence.
For many companies the tally is even higher. One in 10 companies with 1,000 or more employees reported poor application performance costs them approximately $4 million or more per year. In the financial services sector, 40% of respondents reported annual losses of $2 million or more from application problems.
Some of the performance issues survey respondents encountered include slow running applications, downtime, packet loss and jitter. These performance problems typically stem from network problems, according to 44% of senior IT decision-makers surveyed.
The most common cure — or attempted cure — is increasing bandwidth. Among respondents, 57% said they tried increasing bandwidth to alleviate performance problems. But the effectiveness of that tactic is questionable: 75% of all businesses polled said that bandwidth upgrades rarely solve the application performance problems they were experiencing.
“Several studies show that finance and manufacturing verticals are the most affected by losses associated with poor and inconsistent application performance,” says Houda Chabir Robert, vice president, North America, at Ipanema. These losses add up to 9% of enterprises’ annual revenue in the manufacturing industry and 16% in the finance industry, she says. “Obviously, throwing more bandwidth is not solving the problem; nor is it a cost effective solution.”
Meanwhile, the problems prevail.
Just over half (58%) of businesses today can offer their network users application-centric service-level agreements — the remainder can’t. In addition, 65% of respondents admitted they cannot dynamically respond to changes in the network environment and allocate bandwidth on the fly to meet specific demand. This was a problem across all sectors. In particular, 81% of IT directors in the retail, distribution and transport industries said they can’t manage network traffic in real-time.
U.S. readers, what do you think? Do these problems sound familiar?
Ipanema’s research was carried out by Vanson Bourne, an independent research company, which surveyed 100 senior IT decision-makers in large U.K. enterprises.
