Black Friday and the massive cost of data downtime

Enormous amounts of data are being created and managed by organisations all over the world. As you read this, you may not even be aware of how much of your own data has been collected, stored, and used today, this week, or this month.

The increasing importance of data adds three very real risks to companies: downtime, compliance, and security. Over and above these risks, operating off of clean and safe datasets has a direct impact on the much-touted innovations of the fourth industrial revolution: artificial intelligence (AI) and machine learning. Intelligent handling and analysis of data in real-time is a given requirement for a modern business in an increasingly competitive environment.

Locally, a big jump during the Black Friday sale period can be observed compared to 2015 as more Hongkongers join the shopping craze that’s gained increased popularity in the region. A research study conducted last year suggested that around 66% of surveyed Hongkongers were aware of the existence of Black Friday.

The same survey also found that in 2018, Hong Kong showed a 470% increase in sales compared to any ordinary shopping day. The number of online transactions peaked at 11 pm and midnight, with the intensity of online shopping distributed quite evenly throughout the day from 10 am to 11 pm.

Let’s look at the risk of downtime and the implications it could have on retailers during this critical trading period. The 2019 Veeam Cloud Data Management Report found that that on average, IT decision-makers from the retail, distribution, and transport industries said their organisation had experienced six unplanned outages in the previous 12 months, lasting an average of 77 minutes. The same study also found that 73% of organisations admit to not being able to meet consumer demands for uninterrupted data access and services, which could cost a typical company US$ 20 million a year. This astounding figure highlights the devastating effect that business downtime can have on productivity, competitiveness, and consumer confidence.

Last year, certain social media platforms experienced downtime during this peak shopping period, affecting retailers’ revenue as they were thus unable to publish their ads about Black Friday and Cyber Monday.

Consumers just don’t care about things such as load-balancing servers and uptime percentages – what they care about is a seamless experience from browsing, through ordering, tracking, and fulfilment of the transaction. They need to have confidence and trust that services will work as they are supposed to every time, all the time, with their personal data protected.

If a site is not available when a customer wants to make a purchase, chances are he or she will simply move on to the next one. And with new e-commerce platforms taking on incumbents, competition is heating up.  

An hour of downtime can have dire consequences on a retailer’s bottom line any day, but during Black Friday and the December holiday period, the impact is even more severe. The same is true for transport and distribution companies, with demand for next-day and even same-day delivery services significantly higher than average.

If organisations have an outage, they need to restore data with a sense of urgency. We have already established that consumers need, and demand, an always-on service that works. The recovery process needs to be able to protect personal information so that the company remains compliant, all the while protecting the organisation and its processes from security threats, such as malware or ransomware.

Given the growing importance of Black Friday, the stakes are too high for retailers to sit on their laurels when it comes to safeguarding their online infrastructure. Retailers must look at what investments they need to make in their digital platforms to ensure they are open and available at all hours on Black Friday.

Data is vital to a modern competitive organisation and so any investment in the cloud must focus on reliable data availability and mechanisms to protect data. The intelligent use of data unleashes a superpower of competitiveness. On the other hand, downtime, non-compliance and security threats pose a very costly risk to businesses.

Joseph Chan is the senior regional director for Hong Kong, Macau, and Taiwan at Veeam