How Do You Quantify the ROI of Network Monitoring?
November 05, 2015

Dirk Paessler
Paessler AG

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Return on Investment is a tricky term. It is quite simple to take the total cost of software and amortize it over a period of time. But in the case of network monitoring, that analysis ignores what the software actually does. Put simply, network monitoring gives IT visibility and insight into their infrastructure, helping spot problems before they start, and ensuring uptime and availability. Calculating ROI for such software without acknowledging its impact would be akin to amortizing the cost of a sales enablement tool without considering if it increases sales. A more forward-looking approach that accounts for the software’s impact is necessary, but the analysis is not without its issues.

When used correctly, network monitoring software can prevent a number of problems – mail server crashes, website failures, and network downtime, among others. The benefit to users and IT is obvious, but the effect on the bottom line is more difficult to quantify. Losing email for a day affects productivity, but losing email at 9 a.m. on a Monday is different than 4 p.m. on a Friday. Similarly, a website crash is a disaster if it happens for a retailer on Cyber Monday, but is less of a problem for most other businesses.

There have been studies aimed at quantifying the costs of IT failures. In 2012, industry analyst Michael Krigsman published an article that put the total cost of IT failures on the world economy at $3 trillion per year. A Gartner study from 2014 put a finer point on the issue, stating that the average cost of network downtime is $5,600 per minute, or $300,000 an hour. While the effects of downtime and outages will be felt differently by individual businesses, these studies highlight both the need for network monitoring, and illustrate the financial case that can be made for it.

IT managers looking to make the case for network monitoring in their budgets do not need to use analyst figures or estimates. Instead, they can look at a number of local factors – including the costs of IT staffing, the average time it takes to restore failures, number of network failures in the previous year, and SLAs with various service providers. By arming themselves with data, IT leaders will have an easier time explaining to the business side about the need for network monitoring.

The budgeting process for IT grows more difficult every year. Nearly every part of the business now spends money on technology, and in some cases a great deal of the budget is shifted towards marketing and sales enablement. As IT managers are constantly asked to do more with less, they need monitoring more than ever – it keeps an eye on infrastructure when they can’t. It is imperative that IT departments do not lose out on a critical tool simply because it does not have the eye-catching appeal of the "Next Big Thing". But with hard numbers and a little common-sense thinking, IT can make the case for network monitoring successfully.

Dirk Paessler is CEO and Founder of Paessler AG.

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