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November 22, 2011
By Phil Himel

Retailers Face Bandwidth Dilemma on Cyber Mondays

It happens every year on the Monday after Thanksgiving; following the brick-and-mortar retail blitz that is “Black Friday,” consumers flock to their computing devices to scour the Internet for online sales. In 2005, this day was dubbed “Cyber Monday.” In 2010, Cyber Monday accounted for the first-ever $1 billion shopping day.

Like their brick and mortar retail counterparts, a flood of traffic can actually stifle the sales opportunities for online retailers. Clearly, this flood of online activity will spike the demand for bandwidth. In 2010, the number of U.S.-based visits to the top retail sites increased 16% over the previous year on Cyber Monday, according to Experian Hitwise. Among the heavyweights, Macy’s traffic surged by 44%, Apple by 41%, and J.C. Penney’s by 26%.

Online retailers reap the rewards of the day, but they have to because they likely pay for the necessary boost in bandwidth all year long—even if they don’t use it.

This is how the telecomm industry essentially works: You buy a plan that includes bandwidth allocation. You generally purchase more rather than less because you don’t want to get caught short when high volumes of customers head to your site. (Not just for Cyber Monday, but also on other retail-traffic generators—such as Memorial Day weekend sales.) Retailers aren’t alone; other businesses—such as accounting practices as tax time approaches—face the same dilemma. Business owners typically resign themselves to the reality that—most of the time—they are paying for more bandwidth than they’ll use on a daily basis.

But it shouldn’t have to be this way, right? At your home, you’re only charged for the amount of heat you require during the winter. Why should bandwidth be any different? I’d like to say that this problem has already been solved. But it hasn’t. The good news is we’re getting closer to a solution, thanks to continued industry developments with Ethernet connectivity.

Ethernet systems don’t work like traditional ones. If you want to upgrade your capacity, you don’t have to bring in trucks with big rolls of wiring to install. You can pump up the bandwidth equation through existing infrastructure via the network. You may face a certain increased charge on the network side, but it’s nothing like attempting to upgrade alternative systems.

At least this is what our industry is driving toward right now. We’re not quite at a stage where we can offer ‘ramp up/ramp down’ bandwidth packages for customers, but I’m optimistic that by 2012’s Cyber Monday, these kinds of service arrangements will be much closer to becoming a reality. As always, we’ll keep you updated on this blog.

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