Software Performance is Business Performance
Many organizations see software and business as two separate elements. We would like to offer a different perspective: software performance is business performance. If you think that’s a bold statement, just consider the vast body of research from Google and Amazon, among others, all echoing the same: software performance hugely impacts business performance. More specifically, years ago Amazon found that a delay of 100 milliseconds resulted in a 1% loss in sales. The results of research by Google determined that an additional 0.5 seconds in search page loading led to a 20% reduction in traffic.
The truth is, poor software performance results in a bad user experience — which may, in turn, lead to lost sales opportunities, diminished customer satisfaction, and damaged brand reputation. Amazon, for instance, learned it the hard way back in 2012 when the company lost nearly $2 million due to the 30-minute downtime episode. And what about your business’s bottom line? In today’s competitive digital market, users expect top-notch performance. It’s no longer a nice-to-have feature. It’s an absolute must.
We have just discussed the negative aspects of bad software performance. Now, let’s turn it around and consider how superior software performance benefits your business.
The 3 business benefits of superior software performance
1. Increased revenue
If you offer your products or services online, your website must work perfectly: fast, responsive, and reliable software is essential for a good user experience. You don’t want it to crash while 10,000 visitors explore your offerings. Therefore, we advocate for the following logic:
When software operates smoothly and responds quickly, it leads to a better user experience. In the short run, this increases your conversion rate because your software meets the needs of users, which turns them into customers faster. In the long run, better user experience enhances customer satisfaction, which in turn, increases customer loyalty, retention rate, and sales.
This happens because happy customers tend to be loyal and buy more. Whereas unhappy customers are expensive – they are more likely to return products, cancel subscriptions, and require support. For instance, the research by Harvard Business Review revealed that customers of two global businesses ($1B+) who had the best past experiences spend 140% more compared to those with the poorest past experiences.
You will improve conversions, customer satisfaction, and customer retention by providing prospects and customers with an excellent user experience grounded in better software performance. Thus, the better your software performance, the better your revenue.
2. Reduced costs and risk
Better software performance can help reduce the risk of internal disruptions, incidents, and downtime, which, in turn, helps to avoid the costs and challenges associated with last-minute firefighting (e.g., support costs). This is because software that performs well is more likely to be reliable and able to handle unexpected loads and errors. For example, a financial services company with a high-performing trading system is less likely to experience errors that could lead to financial losses.
Want to handle your current number of users with less bandwidth and infrastructure (like CPU, memory, and network bandwidth)? Software performance optimization is the key to reducing cloud costs. This enables a more strategic resource allocation, allowing your software to deliver the same output with fewer hardware and infrastructure requirements.
Additionally, efficient software lowers the operational costs. Fast and responsive software enables employees to complete tasks efficiently, leading to higher productivity across the organization. For instance, an accountant can process more invoices more quickly if they have a fast and reliable ERP system.
3. Minimized environmental footprint
Subsequently, there is another important business benefit associated with optimized cloud usage due to better-performing software – a lower environmental footprint. Improved cloud efficiency directly leads to a reduction of energy consumption and CO2. Globally the cloud is responsible for 2.5% to 3.7% of greenhouse gas emissions. A rough estimate (as it highly depends on the type of cloud used) is that for every 1 million cloud spend reduction, the CO2 emissions are reduced by ~2500 metric tons.
To get an impression of the business benefits relevant to your specific case, make use of our value calculator. You will see an estimation of the reduced costs (including CO2 reduction), as well as predicted revenue growth when Perfana’s Performance Hub is activated for your business case. Perfana’s value calculator additionally estimates an expected number of performance issues to be detected.
How to manage software performance
All this spurs another question: How to manage software performance? In essence, you have three choices:
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“Crossing your fingers”
Remember when you stood on the diving board as a child, shaking? Everyone told you to assume there weren’t any sharks down there and just jump. That worked because they’d tested the waters and knew it was safe. In this case, though, you’re dealing with unexplored ‘software performance waters.’ And they might very well contain real dangers. Let’s be honest, this isn’t really a strategy. Yet it is an approach that many companies use – they just hope that nothing serious happens, and deal with it when it does.
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“Be prepared”
If this is your strategy, you’re taking measures to do damage control should disaster strike. It’s better than the first strategy, but you’re still setting yourself up for disaster. For instance, you implement state-of-the-art monitoring, logging, tracing and notification tools (observability) to be alerted in real-time of oncoming issues and swiftly rectify issues should they arise. While observability is definitely necessary and a big step forward, it still leaves your operations perpetually on the brink of catastrophe. After all, you assume a disruption of your business is practically inevitable.
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“Prevention”
Back to the diving board. Why not stand still for a moment and explore the waters first? If you look before you leap, chances are you’ll avoid disaster altogether. Prevention is always better than the cure; consequently, it is the most cost-effective strategy.
The prevention strategy is directly tied to the principles of Continuous Performance Engineering (CPE), representing a holistic approach to software performance testing, minimizing the risk of production issues and user dissatisfaction. The only way to prevent errors is to test extensively and continuously.
In our next blog post, we will dwell on the importance of CPE as a practice, how performance testing works in agile environments, and how Perfana helps companies to enable CPE.
In the meantime, you are welcome to use the value calculator. Feel free to contact us – we are happy to help your business scale and grow with our Continuous Performance Engineering solution.
