I’d better begin by addressing the nature of the information, since it’s an usual source, and it treads very close to that line between church and state that I work to observe very strictly, and that can produce tricky situations. Fortunately, I’m of the opinion that those situations can be avoided with careful disclosure.
We come across information in all kinds of ways, some of them surprising. In this case, it comes from an advertisement – in particular, an advertisement we’ve been running on the WHIR.
Here’s where it gets tricky, and where I want to be the most clear, because I know how difficult it can be, as a reader of anything online, to separate editorial content from things that have been sponsored, influenced, or subjugated. We hold very tight to our integrity here at the WHIR, and I can assure you there’s no editorial component to our advertising.
Forgive my overly long base-covering preamble, but I figured this post would be less useful if you had reason to doubt its sincerity.
Anyhow, we’ve been running several ads, for several weeks now, promoting a collection of company-specific white papers, which can usually be relied upon to provide a very particular kind of information on a very particular topic. And I have, after a couple of busy weeks, been able to sit down with a couple of them.
In this case, the white paper comes from NeuStar, by way of Forrester Research. The study was commissioned to evaluate the “Total Economic Impact” (I get the sense it’s a Forrester-specific metric) of the Ultra DNS Managed External DNS service.
The title of the document is “TEI Of NeuStar’s UltraDNS – Managed External DNS Service,” which does as succinct a job of describing its contents as anything I could write (and yes, I’m using the ad tracking code to link it here, but it’s just a link to the document – again, I’m not here to sell you anything).
Of course, the study was commissioned by NeuStar as a sales tool, or at least as a package of information that would be offered people investigating a purchase of the service. So, of course, it generally has some very positive things to say about the UltraDNS managed DNS service. And it includes some familiar boilerplate-type language when it’s being descriptive.
But the real value of the document lies in the work it does to quantify the kinds of savings it describes, making a case for the service with actual projected costs for using the service versus operating an equivalent DNS system internally using BIND and in-house tinkering. This kind of precise quantitative information doesn’t always find its way into the sales pitch.
Forrester reportedly conducted in-depth interviews with four customers selected by NeuStar to determine how costs and savings related to the UltraDNS product and the extent of those costs and savings. And it created a “composite organization” to act as an example case of those savings, or the TEI, in the language of the white paper.
I happen to know from an extremely serendipitous, but unrelated, NeuStar sales call last week that a version of the Managed DNS service is available starting at $15 per month. But that is not the nature of the service being discussed in the document. The paper describes the composite organization is a consumer electronics manufacturer with 2,000 employees and 10 websites. It does 20 percent of its sales through its own website, and 80 percent through third-party retailers. Its 10 sites include a corporate site, customer-facing e-commerce sites in several languages, portals for partners and suppliers, a customer support and information portal and an extranet for traveling sales reps.
Take that into account when considering this white paper’s relevance to your own business, of course. You’re not going to be able to achieve the three-year risk-adjusted net savings of $262,759 if you’re a SMB with a yearly IT budget of $50,000. But I’d imagine much of the framework used in calculating the numbers in the document is applicable.
I’m not going to attempt to repeat, or even summarize too much of the document. It’s 25 pages long, and you can download it yourself. But I’ll certainly touch on some of the key points.
The nature of the savings fell into a couple of buckets: the elimination of lost sales (either online or offline) from downtime created by DNS outages; a reduction in infrastructure costs associated with building out an in-house DNS system (this metric deals only with servers); reduced administration costs; and reduced customer support costs.
The document also briefly addresses a set of qualitative benefits that would be more difficult to express in numbers. Those included online advertising revenue; the lifetime value of customers (potentially lost forever in the example of sales lost due to downtime); and costs related to slow resolution time (lost sales and increased support requests).
Much of the document is spent describing the methodology for risk-adjustment or the calculations that produce the cost and benefit numbers – extremely relevant in the context of the document, of course.
The bottom-line points from the white paper overall include a risk-adjusted return on investment of 191 percent over three years for the composite organization, with a break-even point six months after deployment.
Also gleaned from the interviews was the attractiveness of UltraDNS’s five-nines uptime SLA, as well as the capacity for expansion and temporary traffic spikes, the simplicity of migrating and the improvement in security.
If you’re involved in a large business that is actively examining UltraDNS or shopping for a managed DNS product in general, or you’re another sort of business looking for some information on the financial of a managed DNS product on a hypothetical level, this white paper will answer your questions with some very specific numbers.
If you’re asking the questions it asks, I suppose I’m saying, then you should be very interested in the answers it provides. There’s information to be had.
About Liam Eagle
Liam Eagle has worked as a contributor to the Web Host Industry Review since its inception in 2000, and as editor since 2003. He has been editor of the WHIR's print magazine since its launch. His daily involvement in the gathering and reporting of Web hosting news and his regular interaction with Web hosting leaders gives him an uncommonly broad appreciation of the issues and tends facing the business. Through his WHIR blog, Liam spots Web hosting trends and offers opinions on the industry-wide impacts of major developments and the motivation behind big announcements. Follow him on Twitter @liameagle
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