Calculating and Overcoming the Real Costs of Network Downtime with Satellite Communications

By David Myers

The Real Costs of Network Downtime

Every organization, no matter what the industry, faces significant risks when voice and data communications are interrupted. Productivity comes to a halt, transactions cannot be processed, critical applications go offline, and employees can’t serve customers. In addition, liability and fraud exposure increases with the lost records and make-shift manual processes that accompany a disabled network.  Employee and customer safety concerns also start to appear when security and surveillance systems go dark. The impact can be both immediate and long lasting.

If you think that your organization is immune to these risks, you may want to think again. Industry research shows that the typical organization will have up to 3% of its wide area network offline or disabled at any one time. While the headline grabbing disasters like earthquakes, fires, and floods may be the first causes that come to mind, more often than not it is small scale incidents that cause outages to critical communications.  Accidentally severed communications lines due to local construction projects are among the most common causes of extended service outages.

Many organizations use a simple formula like the one below as a tool to assess their specific risk from network or communications failures.

As an example, for a retail chain or branch bank with annual revenues of $1,000,000,000 and a typical 6 day a week 10 hour per day operation (3,120 hours per year), each individual outage can cost over $9,600 in lost productivity for each hour the network is down. For organizations with 7 day a week or 24 hour operations the costs start to mount at an alarming rate.  This calculation only accounts for lost revenue from network downtime.  Spoilage or shrinkage of goods and liability and safety costs increase the financial impact further.  In the end, the key question most organizations need to ask is not “How much disaster recovery communications can I afford?” but rather “How long can my operations afford to be offline?”

Non-stop Networking via Satellite

To keep operations running in the event of a telecommunications disruption, organizations need a “Non-stop Networking” solution that provides continuity of communications and ensures critical applications stay online. The key to implementing Non-stop Networking is to keep three fundamental principles in mind Redundancy, Diversity, and Independence.  Your Non-stop Network will need to incorporate a:

• Redundant Connection – in the form of a “hot standby” link ready to take-over critical applications almost instantly in the event the primary link fails

• Diverse Path – that creates a separate physical route for your voice and data traffic in the event that the primary link is physically severed or inoperable

• Independent Infrastructure – that provides services without dependence on any common carrier assets like local wires, telecom switch centers or cell towers, in the event that the disaster incident affects a larger regional area.

Satellite is the only technology that can truly deliver all three elements of a Non-stop Networking solution.  By combining the best of both common carrier technologies (DSL, cable, T-1, fixed wireless etc.) and the latest in VSAT satellite services, your organization can benefit from a highly reliable and high availability network that ensures your telephone and critical data applications will stay online even if a disaster strikes.

Today’s satellite communications systems are easier than ever before to integrate into your existing IT infrastructure.  Consider for example the VSAT Network Module, developed by leading equipment manufacturer Cisco® Systems.  This device is essentially a satellite modem on a card that can easily be slipped into the routers you already have on premise.  And since the satellite software is integrated into the router operating system, any Cisco certified network engineer can manage the satellite link– just like any other IP connection.

Real World Case Study

Mega Retailer Combines Digital Media & Disaster Recovery Over Single Satellite Network
For a large “Big Box” retailer with over 1,500 locations nationwide, a satellite network served not only as a means of business continuity but paid for itself during normal operations with a digital media application.

• Requirement:  The mega retailer’s marketing department had a plan to deploy multiple flat panel displays in stores to reinforce their brand and increase sales. The challenge was that the marketing group was competing for budget dollars with the IT department who had a mandate to implement a business continuity solution to support critical transactions for a large multi-lane point of sale system, as well as back-office and applications.

• Solution:To meet both requirements, the company deployed a customized VSAT satellite network combining both digital media and business continuity applications on a single platform.  During normal operations the stores’ T-1 lines serve as the primary link for all point-of-sale and back office traffic while the satellite provides multi-cast delivery of content for in-store digital signage displays. In the event of a terrestrial link failure, the digital signage application reverts to cached content, while all critical point-of-sale transactions and back office applications are automatically re-routed over the always-on satellite connection.
  


• Success: By intelligently combining both applications onto a single network, the retail chain successfully implemented their digital media application and saw an increase in per customer sales of 5-7% per store. Simultaneously, they were able to meet the objective of implementing a continuity of operations system. The combined solution actually lowered the clients overall capital expenditure and operation expense costs compared to two stand-alone systems for digital signage and business continuity.

Adding the Security Benefit

The case above illustrates a large scale example, but an organization need not have hundreds of locations to see tangible benefits from a satellite network.  In addition to multi-cast capabilities, satellite also offers a level of inherent security not available from common carrier services like DSL, cable or fixed wireless. 

In the retail industry, organizations must prove that the network over which their credit transactions are processed is PCI certified to protect against fraud and identity theft.  A similar issue exists in the healthcare industry to meet HIPAA compliance for patient records.  Most common carrier services are not PCI compliant, and require a separate device and managed service to meet such security standards.  By contrast the major satellite service providers offer commercial grade services that are PCI certified.  For an added layer of security most satellite providers also offer “private bandwidth” networks, where no other customers share or have access to the space segment used to provide connectivity to your locations.

For many clients in the retail, financial services, or healthcare industries it makes sense to take advantage of the inherent security features in satellite and “split route” their traffic.  By sending security sensitive data like credit card authorizations, financial transactions or patient records over the VSAT link and using common carrier services for broadband Internet access or back-office applications, these companies can get a dual purpose use out of their satellite system.  Having the “two-for-one” benefit of both secure communications for sensitive data and an always-on back-up system for other voice, video, and data applications can make all the difference when it comes time to allocate precious budget dollars.

Conclusion

Corporate and government organizations alike continually search for new ways to protect their communications lifeline and keep operations running during even the worst of circumstances.  Evaluating the real costs of network downtime may draw many to conclude that a Non-stop Network that combines the best of both terrestrial and satellite technologies is the best option.  And by thinking through a “dual purpose” for the satellite network, you may be able to realize significant efficiencies and security benefits during “normal” modes of operation, as well as benefit from the peace of mind that comes from a well planned and implemented disaster recovery communications system.

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