StratVantage Consulting, LLC — StratVantage News Summary 03/19/01

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StratVantage Consulting, LLC — StratVantage News Summary 03/19/01

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The News – 03/19/01

NYSE Fines Online Brokerage for Bad Service

In early March, the New York Stock Exchange levied a $225,000 fine and censured TD Waterhouse Investor Services for failures in filling online stock orders and inadequate customer service related to the outages.

Waterhouse, the second largest online broker, was unable to process online customer orders on 33 different trade days from November 1997 to last April. The Web site failures ranged from 2 minutes to 1 hour and 51 minutes. The NYSE also said that Waterhouse failed to handle the outages properly, resulting in more than 20,000 customer complaints.

In February, online broker Charles Schwab was forced to switch customers to a backup server due to database problems. The Exchange has taken no action against Schwab as yet.

The NYSE’s decision to get tough on Waterhouse indicates the importance of Web site performance for businesses. If you are doing business on the Web, even if it’s only a small percentage of your total revenue, you need to treat it with the same care you’d treat your other channels. The Exchange decided to fine Waterhouse more for the way they handled the outages than for the outages themselves.

At this stage of the Internet’s development, it is nowhere near the level of reliability of, say, the power grid or the telephone system. These systems operate at “5 9s” (99.999 percent uptime). That means they are down no more than 5 minutes a year. TD Waterhouse’s experience is probably typical of large-scale business implementations on the Internet, and it’s nowhere near 5 9s.

Thus it’s important if you’re offering services over the Internet to negotiate a Service Level Agreement (SLA) with your clients that specifies uptime, and, more importantly, what happens when outages happen. There’s a good white paper on SLAs on the Geneer Web site if you’re interested.


Watch Out for Petabytes

This story has nothing to do with rabid dogs or cranky felines. Rather, it’s about the next frontier of disk storage – petabyte capacity. A recent Yankee Group study predicts that, although it may take the average business a year to use one terabyte of storage today, it will take only 30 days to use the same capacity in 2002. A terabyte is 1,000 gigabytes and a gigabyte is a billion bytes, or characters. A petabyte is 1,000 terabytes. It is common to be able to buy 30 to 80 gigabyte PC hard drives these days. However, by 2003, it will take only a day to use a terabyte of storage, and in 2004, just one tenth of a day, the study said.

If your business is using 10 terabytes of storage a day, you’d churn through 125 of those 80 gigabyte drives each workday. So obviously, hard disk technology is going to need to drastically improve – to the petabyte range. Higher drive capacities are on the way, with 200 gigabyte drives slated to hit the market by the end of the year. And British disk vendor Keele High Density claims to be able to fit 11 terabytes in a credit card sized device within the next two years.

All this is great, but what will you be doing in a few years to require all this storage? Today a single 40 gigabyte disk drive can hold either:

  • the text from a stack of paper 2,000 feet high
  • 27 days of CD-quality MP3 songs
  • 3 hours of digital video
  • 10 DVD movies, in MPEG-2 format

There are a few applications that could drive petabytes of volume.

First, network teleconferencing will improve. Rather than running in postage-stamp-sized windows on your screen, virtual meetings will fill your screen, requiring lots of bandwidth. Chances are good you’ll want to save records of important virtual conferences, and that will take a lot of storage.

Another disk hogging application will be the intelligent supply chain. Today companies are beginning to put into place the means to take information from the factory floor and make it available throughout the enterprise and to supply chain partners. In turn, your supply chain partners (retailers, logistics firms, warehouses) will share their data to you. (For an indication on how this may go, see my white paper , Taking Control of the B2B Exchange: What’s Next in the Supply Chain Evolution.) While it’s certainly true that nobody will ever have the time to examine in detail all this information, there is no question it will all be rolled up into sophisticated decision support applications. Thus, all this tremendously valuable data will be stored in giant data warehouses, and they’re going to need a lot of disk space.

Finally, the traditional network killer app, email, will continue to grow. (I doubt any of you would predict a decrease in the amount of email over the next four years.) This growth will present a variety of challenges (like how will you survive being inundated with hundreds of emails a day). But there’s a good chance that one of the challenges will be where to put it all. If your company doesn’t have an email retirement plan in which you destroy all email records over a certain age, this very newsletter could be enshrined somewhere on your network in 2004, taking up space.

So what can you do now? Whenever you buy a computer, or especially a server, get the largest hard drive available. Look into using a Storage Service Provider (SSP), a company that provides storage you can use over the Internet. Or you can outsource your applications to an Application Service Provider (ASP) and let them worry about it.


Briefly Noted

  • Shameless Self-Promotion Dept.: StratVantage has launched a new service, CTOMentor™, designed to allow Chief Technology Officers and other technical leaders to get rid of the Guilt Stack, that pile of magazines you’ll get around to reading someday.

    CTOMentor is a subscription advisory service tailored to customers’ industry and personal information needs. Four times a year CTOMentor provides a four-hour briefing for subscribers and their staffs on the most important emerging technology trends that could affect their businesses. As part of the service, subscribers also get a weekly email newsletter, Just the Right Stuff™, containing links to the Top 10 Must Read articles needed to stay current. These and other CTOMentor services will let you Burn Your Inbox™.

    As part of its launch, CTOMentor is offering a two-part white paper on peer-to-peer technology: Peer-to-Peer Computing and Business Networks: More Than Meets the Ear. Part 1, What is P2P?, is available for free on the CTOMentor Web site . Part 2, How Are Businesses Using P2P?, is available for $50.

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