Speakers: Mehdi Daoudi, Co-Founder and CEO, Catchpoint Systems; Bill Kish, CEO, Coyote Point; Peter Melerud, Co-Founder and COO, KEMP Technologies

Moderator: Bojan Simic, President and Principal Analyst, TRAC Research

Bojan Simic: Our topic today is how organizations in the small to medium size market sector manage the performance of their web applications. Before we get into the specifics of how they do that from a technology and processes perspective, one question that I have for all of our guest speakers is how they actually go about defining this sector. As you are probably aware, in some other IT markets companies go about defining their market sectors based on number of users, number of employees or revenue size. Some of these metrics are more specific in web performance management, so if you folks wouldn't mind sharing how you go about defining what falls into that SMB category for your organizations.

Bill Kish: It's interesting. There are a number of different ways of categorizing the size of a company. One of the typical ways of sizing a company is by the number of seats that you have. On the internet, the number of seats has no relationship with the number of chairs in your office. You know, you've got potentially, thousands, tens of thousands or even hundreds of thousands of visitors to your site, and that's really the way we size businesses and try to determine which products are best for them. At Coyote Point, we look at the market that we serve more as the mid-market than the classic SMB. I think of the SMB as smaller shops that maybe have 10 employees or something of the like and that potentially is a market that serves tens of thousands of users. Think about Craigslist, for example, where a very small company was one of the major sites on the internet. But I think that, for our company anyway, it is the amount of clients that you are serving and the amount of bandwith and the amount of page views that you are serving them; that is the critical factor.

Peter Melerud: In our space as well, we also look at a lot of the same criteria that Bill mentioned. From a customer standpoint, sizing wise, we also look at the number of servers they may have, for example. Rather than look at the number of PC's or desktops, we look at the number of servers they have, how many applications, what type of applications that they are using, whether they are web facing or internet based and certainly throughput and bandwidth come into play. Again, from the standpoint of the kind of market we serve, we serve anyone from 2 servers and up from there, which is not necessarily a classic SMB model, but both on the smaller side. We definitely focus on customers that have just added their second server and grow from there from tens, hundreds and sometimes thousands.

Mehdi Daoudi: I agree with Bill and Peter. The definition for SMB for us is that we provide a service, so it's a little bit different than selling hardware/equipment but when we talk to companies in different segments we tend to define a small and medium business based on their needs and budgets. For example, we might have a Fortune 100 that is just getting into the web performance business and they might just want to spend a few hundred dollars a month, so that would "put them in the SMB" category versus a company willing to spend tens of thousands of dollars on Web performance monitoring. So, it's really based on their needs and budget.

Bojan Simic: One thing that we are seeing in our research about SMB companies is many of them understand how important it is to manage their websites performance. We had companies that fall into that category that generate $20 million a year just through business that comes through their websites, but also if you look at the capabilities that a lot of these organizations have, many of them that heavily rely on their websites don't even have basic capabilities for managing web performance. Typically the pushback is "We are a small company and can't afford that". Just to put things into perspective, what type of investment and what capabilities are these organizations looking to if they are trying to optimize the performance of their websites?

Bill Kish: I think that anyone who is generating 20 million dollars through their website and isn't deploying some kind of application delivery enhancement technology and performance monitoring is crazy. It's very cheap insurance for that much revenue. You asked to characterize how much an application delivery control or technology would cost to deploy and we are talking about, in the market that we serve, anywhere between $3,000 to $12,000 for the basic functionality. What you get out of that is reliability. You eliminate single points of failure across the entire application stack. There have been plenty of studies that have been done to show, for an ecommerce site that generates so much per day, not only does how much a minute of downtime cost, but how many visitors. The customers will go away for every additional second it costs to load a page or for every additional second of latency that it takes to process an order. These are really critical things that our users, whether they be businesses deploying internet applications or websites, really need to take into account. Reliability is the first and foremost thing and the types of technology that we are talking about are very cheap insurance for the level of value that these technologies provide to the users that deploy them.

Peter Melerud: Part of the question was about metrics and what can businesses look at when deciding when or if to deploy these types of technologies and certainly the first metric I'd suggest is to look at your downtime, look at the past month, past year, past quarter and see how much downtime the business has experienced as a result of the site being down due to server or application problems. Once you start plugging those metrics and numbers and loss of revenue into the equation, then the cost of buying these technologies becomes almost a non issue. Metrics relative to scalability and performance are easily obtainable these days, and businesses that are let alone doing $20 million in revenue or are not even doing 6 figures yet, it can be quite painful for them not to have a solution like that in place, because that only means a significantly higher loss in revenues to them. 

Mehdi Daoudi: Any company that generates any amount of money online and depends heavily on their online traffic, even if it's a hundred thousand dollars a year, need to buy insurance. Whether it's a technology the ensures reliability or monitoring, I'd look at them like an insurance policy. You don't go buy a million dollar house and not put an alarm on it. Any company needs to put a strategy in place, but the first thing they need to realize is that they need to invest a person. They need to wake up and say performance is important, my reliablility is important, my uptime is important, so they need to at first, make that human investment. After that, it's easy to come up with a plan to dedicate financial resources to implement solutions. There are so many studies where Amazon downtime cost them $30,000 per minute, where Goodge added 400 miliseconds to their site which created a huge drop in terms of search results. One of the things we're noticing is that more and more small companies are coming to that realization. They are waking up and coming to us looking for monitoring services because Google is ranking them lower because their page loads 20 or 30 seconds. The other important factor that we are noticing is that downtime is not as important these days. There is redundancy, people use Amazon, cloud servers, etc., but the biggest challenge that I find with some of the companies that we talk to is performance. They do not understand the concept of how performance is driving away some of their business. We blogged about it a few months ago, but performance is the silent killer, it is the silent uptime or downtime, and people are starting to realize that.