Survey: Application Performance Problems Cost UK Businesses More Than $1 Million Each Year.

Ipanema-sponsored Survey Finds 75% of Surveyed Firms Say Upgrades Rarely Solve Application Performance Problems

WALTHAM, Mass. -- Research commissioned by Ipanema Technologies, a leader in application traffic management systems for wide area networks (WANs), reveals that application performance problems are costing UK enterprises more than $1 million per year due mainly to reduced productivity, lost sales, and diminished customer confidence.

Organizations of 1000 or more employees were polled, and one in ten reported poor application performance costs them approximately $4 million or more per year. The figures reported were particularly high in the financial services sector, where 40% of respondents reported annual losses of $2 million or more from application problems.

Performance issues encountered include slow running applications, downtime, packet loss and jitter. These performance problems typically stem from network problems, according to 44% of senior IT decision-makers surveyed. Businesses most commonly respond by increasing spending on bandwidth; however, while 57% admit resorting to this tactic, 75% of all businesses polled complained that bandwidth upgrades rarely solve the application performance problems they were experiencing. As a result, a considerable 93% of respondents said they are looking for greater visibility and control of traffic over the WAN. This figure was consistent across all sectors polled.

Houda Chabir Robert, VP North America at Ipanema Technologies, said, "It is interesting to see the same network and application performance phenomena here in the U.S. Several studies show that finance and manufacturing verticals are the most affected by losses associated with poor and inconsistent application performance. These losses represent between 9% (manufacturing) to 16% (finance) of enterprises' annual revenue. Obviously, throwing more bandwidth is not solving the problem; nor is it a cost effective solution. Enterprises need to have a strategic approach to align their IT with their business objectives for a better quality of experience for the end users."

At present, only 58% of businesses are able to offer their network users application-centric service level agreements (SLAs), and this is not evenly spread across industries. Just one-third of manufacturing organizations offer them compared to 56% of financial services companies. These figures are likely to be low; as 65% of respondents admitted they cannot dynamically respond to changes in the network environment and allocate bandwidth on the fly to meet specific demand. This was a problem across all sectors, particularly the retail, distribution and transport industries, where 81% of IT directors said they are unable to manage network traffic in real-time.

Chabir added, "Productivity is directly impacted by application performance. For applications running over the WAN, real time monitoring and guaranteed performance of critical ones are key to aligning IT with business objectives. Defining SLAs at the application level is a must to provide better user experience and to improve productivity."

Ipanema develops and sells business network optimization solutions that automatically manage and maximize network application performance according to business critical needs. Its solutions are ideal for organizations deploying VoIP, ERP applications and other network-sensitive applications, as well as initiating ITIL (IT infrastructure library) projects. Network integrators market the Ipanema System to enterprises, while telecom service providers and network managed service providers offer it as a service. Ipanema manages more than 30,000 sites in 75 countries.

The research was carried out by Vanson Bourne, an independent research company, which surveyed 100 senior IT decision-makers in large UK enterprises.

About Ipanema Technologies (www.ipanematech.com)

Ipanema is a provider of advanced application traffic management solutions that align the network with business goals. Network integrators market Ipanema's Business Network Optimization solutions to enterprises, while telecom service providers and network managed service providers offer those as a service.

The Business Network Optimization solution is simple, automated and scalable and allows enterprises to easily control, guarantee and accelerate their critical application performance regardless of network conditions. It relies on Ipanema's Autonomic Networking System to provide: full visibility of application flows over the network, global and dynamic optimization of network resources, transparent application acceleration, network application governance functions and scalable service delivery capabilities. Ipanema's Business Network Optimization solutions are deployed in more than 75 countries. Its customers include large organizations such as Leroy Merlin, Sodiaal, Altadis, Sephora, Brittany Ferries, Bongrain, Michael Page, NH Hoteles, SGS, Nespresso, Clariant, TNT, L'Oreal, Cap Gemini, Henkel, the French Army, Sanofi-Avenits, Europcar, Rhodia, Lexmark, etc. Ipanema is based in France, the U.S., Germany and UK.