Improving incident response – and with it, brand equity – is always a beneficial practice. And during these turbulent times in the software industry, it has never been more important. But amidst layoffs of SRE teams, slashed budgets, and elimination of spending on tools, it has also never been more difficult to deliver reliable software.
Another difficulty companies face in delivering reliable products is that software teams are increasingly embracing third-party cloud dependencies. An average of 130 per digital business, in fact. However, these dependencies can be a huge liability.
Best Bang for Your Limited SRE Buck? Cloud Dependency Monitoring.
Cloud dependencies were responsible for up to 70% of SaaS outages in 2022 according to research by the Uptime institute. So with increased adoption of cloud dependencies comes increased chance for outages, but SRE resources are shrinking.
With incident responders having to do more with less, and outages increasingly caused by upstream vendors, the cost of not having Cloud Dependency Monitoring (CDM) in place is real, with the ROI of adding this capability to your observability stack clear. Let’s take a look at how proactive, direct monitoring of cloud dependency health pays for itself, sometimes after only one incident.
Faster Incident Resolution = Revenue and Resources Rescued
One of the most direct ways monitoring third-party cloud dependencies can yield ROI is by reducing downtime. As we all know, downtime can lead to significant financial losses and a poor user experience, so reduced downtime = rescued revenue.
When your software is built on top of other cloud platforms, SaaS products, and APIs, incident response often starts out with the question “Is it us, or is it them?” By directly monitoring the functionality, performance, and availability of cloud dependencies, organizations can identify the internal versus an external source of the issue. And with tools like real-time functional testing from Metrist, they can determine if a dependency is to blame 20-30 minutes faster than relying on status pages.
When corrective actions are taken sooner, they can prevent service outages or minimize the outage’s impact. This ensures a smooth and consistent user experience, which is critical for maintaining customer satisfaction and loyalty.
Even More Ways Cloud Dependency Monitoring Can Improve ROI
Aside from the obvious faster incident resolution, cloud dependency monitoring can have a great ROI because of the following traits:
- More Efficient Incident Response. By monitoring third-party cloud dependencies, teams can gather valuable data that can be used to optimize incident response processes in the moment, and improve future responses. The additional data from third-party dependency monitoring offers context that can help teams better categorize incident severity, allocate resources more effectively, and streamline communication during critical events. Consequently, organizations can respond more efficiently to every incident, further reducing potential impacts on customers and the bottom line.
- Limiting Lost Revenue. Downtime and poor performance can lead to lost revenue, as customers may abandon transactions or switch to competitors. Monitoring and alerting on third-party cloud dependencies can help organizations avoid or minimize these situations, preserving revenue streams and ensuring customer satisfaction. By quickly identifying and addressing issues, organizations can limit the potential financial losses associated with downtime and performance degradation.
- Preserving Brand Reputation. Your organization’s brand reputation is a critical asset and one that can be negatively impacted by poor performance or service outages. By monitoring and managing the health of third-party cloud services, you can provide a more consistent and reliable user experience through fewer, and shorter incidents.
- Improved Customer Success. there is nothing that can be done to avoid the impact of an upstream dependency outage. In those cases, third-party dependency monitoring can help customer support organizations be better prepared for a spike in incoming support requests, be better informed to respond meaningfully, or even proactively communicate service degradation to users.
All of these aspects of cloud dependency monitoring allow it to have a significant ROI. Not only does it help improve labor costs and lost revenue, it helps to maintain customer trust and confidence in your brand, protecting your reputation (and profits) in the long run.
Have Doubts? The Math of Cloud Dependency Monitoring ROI
Let’s consider a hypothetical scenario to discuss the ROI of cloud dependency monitoring. A SaaS product experiences 20 major incidents per year. It takes the 8-person response team for these incidents and an average of 1 hour to diagnose and resolve each incident.
Without Cloud Dependency Monitoring
With the average engineering cost being $100/hour, and estimated revenue loss per hour of downtime at $10,000, the total cost per 1-hour incident is about $10,800. If this product had 20 incidents per year, the total cost of incidents per year, including engineering staff and revenue loss, would amount to $216,000.
| Per 1-Hour Incident | Per Year (20 Incidents) | |
| Staff of 8 People | $800 | $16,000 |
| Revenue Loss | $10,000 | $200,000 |
| Total | $10,800/Incident | $216,000/Year |
With Cloud Dependency Monitoring
However, when the organization implements proactive monitoring and alerting of third-party cloud dependency outages, they don’t have to wait 25 minutes for a status page update before they take action. That means in this scenario, the average time spent diagnosing and resolving each incident decreases by 42%.
These savings result in a reduction of $6,720 in engineering staff costs, and a $84,000 reduction in lost revenue. As a result, the total ROI from adding cloud dependency monitoring to the engineering team’s observability stack is $54,000, without including the ROI of customer satisfaction and improved brand reputation.
| Savings Per Year (42%) | |
| Staff of 8 People | $6,720 |
| Revenue Savings | $84,000 |
| Total | $54,000/Savings per Year |
A lot of labor and lost revenue can result from downtime due to third-party outages. And so monitoring those outages can have a significant ROI.
How To Unlock the Cloud Dependency Monitoring ROI
As organizations increasingly rely on third-party cloud services, it’s essential to monitor, alert, and report on the service health of third-party cloud dependencies. By doing so, businesses can unlock significant ROI benefits, including reduced downtime, faster incident resolution, more efficient incident response, limiting lost revenue, and preserving brand reputation.
If you are ready to increase visibility and take action on incidents 25 minutes sooner, give Metrist a try for free!
Just Schedule a Demo to learn more and get set up.
