Web site disruptions cripple 75 per cent of e-businesses: study

Nearly 75 per cent of all e-businesses in the U.S. with US$200 million or more in on-line revenues have suffered a Web site failure in the past six months, proclaimed a recently released study by IDC Corp.

Entitled Reducing Disruptions to eBusiness with Appropriate Content Management Tools, the IDC white paper stated that Web site disruptions are not confined to small businesses, although SMEs (small and medium enterprises) generally tend to over-estimate their own ability to manage content manually. Regardless, any e-business is likely to take a hit in the bankbook when service disruptions run amok.

“It’s a question of scale,” said IDC analyst Dick Heiman, who co-authored the report. “There’s no customer loyalty in e-business, so the cost of lost business is hard to quantify.”

An IDC survey of IT managers revealed 63.5 per cent of those queried were very concerned about the damage an outage could do to a company’s image; nearly one-half expressed concern about lost revenue; and many added that more than four outages within a six-month span could spell the end of their jobs.

“High profile dot-coms take great pleasure in reporting major failures of large companies,” Heiman said. “As a customer, if I can’t get to Amazon.com for example, I’m off to another Web site that can deliver what I need. And what happens if I like that Web site better anyhow?”

When eBay’s auction Web site blacked out for six hours last June, and then became inaccessible to its users for nearly 22 hours, the source of the trouble was attributed to software upgrades. These multiple outages proved how vulnerable a large e-commerce site can be and the market’s overall fragility, Heiman said.

“eBay has since recovered, but in general most respondents regard the situation with not much urgency,” he said. “We didn’t interview eBay – it was a random survey – most folks (who responded) were mainstream adopters and [a content management strategy] was not viewed as absolutely critical. These are business people and the problem is seen as an IT issue, thus the IT staff should take care of it.”

The study was commissioned by Waterloo, Ont.-based Vertical Sky Inc. – an Internet start-up specializing in e-business solutions – as a means to justify the company’s recently-launched evolution management software for managing Web content, software applications and business processes.

Vertical Sky said enterprises are subject to Web evolution shock when they’re upgrading their sites from first-generation transactive capabilities to second-generation e-business processes – morphing from a pure content site to one with EDI exchange and supplier integration.

“We are focused on this emerging business problem,” said Ellyn Winters, Vertical Sky’s director of corporate marketing, of the enterprise’s interest in the subject. “The next generation of e-business – we call it evolution shock – affects the back-office systems and business processes that need to change on the fly…it is the management of [all aspects of an e-business site] working in concert that is needed, or it will paralyse an organization.”

Heiman said IDC surveyed IT managers from both SMEs to large corporations for the purpose of the report. Of those surveyed, few admitted to recognizing a lack of change-management as the root cause of disruptions. However, 49 per cent of the respondents indicated they employed change-management tools as part of their Web application disruption prevention arsenal.

Moreover, in terms of critical purchase factors, the respondents ranked the following decision factors in order of importance: features and functions; compatibility with other IT systems; training; ease of use; price; ease of installation; and brand name – including the vendor’s track record and perceived longevity.

Heiman added that in IDC’s view, as more businesses turn to the Web and expose mission-critical and business-critical applications to customers, partners and competitors, a content management strategy is of the utmost importance.

“It’s a part of the business if it’s an e-business,” he warned. “It should be a major part of your overall business plan.”