Edmunds.com Saving over $1.2 Million With AppDynamics

Edmunds.com, the leading online automobile resource, is in the fast lane to achieve $1.2 Million in savings using AppDynamics to monitor their web application performance. John Martin, Senior Director of Production Engineering, opens up about his road trip through managing application performance.  Martin’s operations team was able to reach goals and destinations that were not previously possible and turn “feelings into facts”, by using AppDynamics.

Driving a DevOps Culture

Martin’s goals as the leader of production engineering at Edmunds.com include maintaining a collaborative DevOps culture and keeping response times below 150 milliseconds.  “Our development team is very data-driven”, said Martin, “so it is necessary that whenever an event occurs in production that the operations teams are able to feed back actual data to development.”  With AppDynamics, the operations team is able to present “facts instead of feelings” to development.

The ROI of APM: Application Performance and Impatient End Users

How much time will your customers spend on your web site if it slows to a crawl? Will they linger patiently, or will they immediately surf away to a competitor?

According to a 2009 research study by Forrester Consulting, 47% of users expect a web page to load in two seconds or less–and 40% will abandon a web page if it takes more than three seconds to load. Those time measurements have doubled from a similar study published in 2006; as transfer speeds have increased, users expect their web sites to keep pace.

From these numbers, it’s easy to understand the incredible impact of lost revenue for every second that an application performs poorly. Unacceptable performance is a surefire way to cause the end user to surf away and perhaps never return. What is the cost of a transaction taking 4 seconds, when it should only take 1 second? Again, according to the 2009 Forrester study, a matter of seconds constitutes the average online shopper’s expectation for a web page to load. Can you measure customer frustration in terms of its actual revenue impact upon your organization?

The way to measure lost revenue due to poor performance is to determine the application’s Service Level Agreements (SLAs), attach revenue to them, and evaluate how much your organization can preserve through maintaining and even improving those SLAs. For example: how long should the “check out” transaction take? How long should the “add to cart” transaction take?

Once you determine these time frames, you can attach dollar numbers to each of them. For example, let’s say that your SLA is to have the “pay my bill” transaction on a banking site take 1 second. Let’s say that for every time that SLA is violated, the company loses 5 dollars in revenue—due to the aggregate result of some users abandoning their sessions to slow performance.

If the organization is able to determine how often the “pay my bill” transaction is being violated, it can assign a revenue number to the ability to maintain that SLA over time—say, a 99.99% success rate at maintaining the SLAs of 50,000 transactions over a three month period. If the previous success rate had only been 90%, that means 5,000 successful transactions have been rescued. At 5 dollars a transaction, this becomes $25,000 in revenue that never leaves the bottom line.

Obviously, determining and maintaining SLAs can take a lot of work. But the right application performance management system can assist you by learning the behavior of the application, and by creating dynamic baselines that can dramatically help reduce your time to develop SLAs. And once you develop those SLAs, and attach revenue numbers to them, you will quickly see how managing application performance on a proactive basis can help protect your company’s revenue stream.