Compensation (n.) the act or state of profiting

, posted: 11-Jan-2010 10:00

iStock_000000215562XSmall The definition above is taken out of an online dictionary, and I've Kiwified it.  Why is it when we suffer an outage of a service we pay for, that most Kiwis come up with the most unreasonable levels of compensation?

Maybe it's because I'm often on the provider side of the equation, but I think I'm very realistic and forgiving when it comes to a third party failing to deliver a service I'm paying for.  My whole thinking revolves around one simple idea: sh*t happens (from now on, the acronym S.H.).  Am I saying that every outage shouldn't be questioned and just given an "oh well"? No, definitely not. Suppliers should be and need to be held accountable for any issues with their delivery of a service, however, you need to be realistic, and make sure your own bases are well covered.

The argument of "my business depends on this 100%" also doesn't sit well with me - if you have one provider that you depend on, and in the event of an outage you are up a certain creek without the wooden thing, it's your problem.  Running a business without redundancy of vital parts is just asking for trouble. Even the most well thought out and tested disaster recover plans can quickly come unstuck, and it's up to you as a business to be prepared for the worst.

At 3Bit we provide a variety of web-based services (eg web hosting, emails, dedicated servers) for a range of clients in different industries.  We've had the odd outage (few and far between, touch wood) and we work hard to get our clients back up and running as quickly as possible.  We keep them up-to-date with personal phone calls and emails, as a happy client means more word-of-mouth referrals, which we depend on.  An unhappy client will cancel their service, and not hold back in publishing negative feedback to the world. 

We will credit an outage period to a client's account for their monthly fee and that's it.  Lost sales and business are not covered.  When signing up a new client, if I feel an outage would have a high detrimental effect to their business, I will often suggest mirrored setups with different providers.  If they ask for an S.L.A. (Service Level Agreement), I will get one from our data centre provider and make sure everything is covered (including duplicating their setup in another physical data centre). Why? Because S.H.

Two events come to mind when thinking about outages and compensation. 

Back in June, Genesis Energy had an outage where its prepay customers were unable to top-up their accounts due to a computing error.  I remember an interview on TV1 where a consumer was asked how she felt about the compensation she was being offered, and I remember she commented that it wasn't good enough (unfortunately I can't find this interview on TVNZ On-Demand).  My query is, what else could Genesis have done? They've apologised, credited her account, and she still wants more? Would she have been satisfied if Genesis delivered their web programmers to her door step, and given her a paintball gun to exact her revenge?

In December, Telecom had a massive outage from Taupo south.  There was a mass wave of posts from Geekzone users, some of who seem to depend solely on Telecom mobile for life or death situations.  As always, the demands for compensation ranged from the ridiculous to the more realistic.  I think insane's post nicely sum up my feelings:

Personally I don't see why everyone is jumping up and down for compensation. Like DSL your mobile service is best effort. When your phone line has issues and your internet connectivity is cut you don't automatically get a credit from your ISP as you have no SLA.

Any Credit/offer Telecom give customers should be seen as a bonus. If you're relying on your best effort mobile service to support some mission critical application / service then perhaps you should invest in your own measures of redundancy instead of expecting Telecom to take care of this for you.

If it's important you'll have some sort of a backup. If your answer to 'did you have a backup?' is no, then it's obviously not that important to you.

Just recently, one of our virtual servers was down due to an outage with iServe.  What do I expect from them? I expect regular updates with an accurate E.T.A. as possible (being called on mobile from their operations manager was a good start), a credit on our account for the down-time, plus assurance it won't happen again.  I wasn't really too worried with the down-time as we had a Plan B.

Why? Because S.H.

Don't get caught with your pants down. Expect the worst case scenario, and plan for it accordingly.

Other related posts:
Cyber attacks on NZ small business
How one database query can fix HOP cards
Review: Navman MiVUE680

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New Zealand

I'm Nate Dunn, and I work for 3Bit, and am a moderator here at Geekzone.

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