Daily Archives: December 1, 2011

Performance can be a disruptive competitive advantage

All of us are used to going to travel sites, especially for airline tickets, and waiting a while for the appropriate results to be extracted and displayed to us. I recently saw Google Flight Search for the first time and was astonished by its raw speed — essentially completely instant.

I frequently talk to customers about acceleration solutions, and discuss the business value of performance. Specifically, this is a look at business metrics that measure the success of a website or application — time spent on your site, conversion rate, shopping basket value, page views, ad views, transactions processed, employee productivity, decline in call center volume, and so forth. You compare the money associated with these metrics, against the cost of the solutions, to look at comparative ROI.

The business value of performance is usually tied to industry in a narrow and specific way, because users have a particular set of expectations and needs. For instance, for travel sites, a certain amount of performance is necessary in order to make the site usable, but the long waits for searches are things that users are conditioned to, making their overall performance expectations relatively low. Travel sites usually discover that generalized site responsiveness improve the user experience and cause revenue per site visit to increase — but only up to a certain point, at which point in time it plateaus, as the site has enough responsiveness that users aren’t discouraged from using it, and they’re going to buy what they came to buy.

Google Flight Search proves that you can “break through” the performance ceiling to actually entirely change the user experience, though. This is not the kind of incremental improvement you can achieve through acceleration techniques, though; instead, it’s a core change that affects the thing that is slowest, which is generally the back-end database and business logic, not the network. This can actually be a disruptive competitive advantage.

I typically ask my CDN clients, “What are the factors that make your site slow?” In many cases, they need to do something that goes beyond what edge caching or even network optimization (dynamic acceleration) can achieve. They need to reduce their page weight, or write better pages (and may benefit from front-end optimization techniques), or to improve the back-end responsiveness. Acceleration techniques are often used to band-aid a core problem with performance, just like CDN professional services to make a site cacheable are often used to band-aid a core problem with site structure. At some point in time it becomes more cost-effective to fix the core problem.

Too few businesses design their websites and applications with speed in mind.

Cotendo’s potential acquisition

Thus far, merger-watchers eyeing the rumored bidding for Cotendo seem to be asking: Why this high a valuation compared to the rest of the CDN industry? Who are the potential suitors and why? What if anything does Cotendo offer that other CDNs don’t? How do the various dynamic offerings in the market compare? Who else might be ripe for acquisition? What is the general trend of M&A activity in the CDN industry going forward? Do I agree with Dan Rayburn’s commentary on this deal?

However, for various reasons, I am not currently publicly commenting further on Twitter or my blog, or really in general with non-Gartner-clients, regarding the potential acquisition of Cotendo by Akamai (or AT&T, or Juniper, or anyone else who might be interested in buying them).

If you are a Gartner client, and you want to discuss the topic, you may request a written response or a phone call through the usual mechanisms for inquiry.