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March 26, 2015

Q&A: Business interruptions with Troy McAlpin

Why should enterprises be worried about business interruptions? McAlpin, CEO of xMatters, tells you why you should be worried.

By Alexander Sword

CBR sat down with Troy McAlpin, CEO of xMatters, the intelligent communications company, to talk about interruptions and how enterprises can defend against them.

Q: What can intelligent communications bring to businesses?

When something went wrong, it used to be acceptable to find someone within ten or fifteen or twenty minutes. That’s because there really wasn’t an impact from that incident. In today’s world, where everyone has at least two or three devices, they are highly connected, always on – the expectation is that business is highly connected and always on.

If something doesn’t go according to plan, the first person that wants to know about it is the customer. What’s changing in the marketplace and changing relatively rapidly, is that we’re continually becoming more connected. As this continues, and we become more and more connected, you have the possibility of having, Cisco estimates, 25 billion devices connected by the end of this year.

Those devices are noisy. They’re creating noise all the time, that sometimes people need to know about, but not all the time. I don’t want my three devices ringing or buzzing any time there’s a false alarm or false alerts coming in.

With that many devices now sending off signals into a very noisy atmosphere, people are no longer able to respond, because they can no longer figure out, "am I needed, am I really needed, should I be helpful, should I not be helpful?"

xMatters’s vision and drive is to add an intelligent communication layer across all of the different events, noises and incidents that are going off on monitored devices to ensure that the things that make it out to people are exactly relevant for that person – whether they are going to fix it, or they need to know about it, or they need to understand that their service has been impacted.

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Q: You are focused on using intelligent communications to help businesses through interruptions. What are the costs to business of IT interruptions?

The direct costs are usually around personnel efficiency. If you’re paying a highly paid software engineer to sit around and deal with false alarms, there’re tangible savings there by not having those people doing that – they could be on better tasks.

The cost to business when there’s an impact ranges depending on who you talk to. Financial services usually have the highest cost per minute in downtime. Out of necessity they have to figure it out relatively quickly. Financial services companies as well as the other large enterprises have lots of monitored devices already. Hospitals have monitored machinery, manufacturing has monitored manufacturing facilities.

As every single thing that’s being armed with a sensor and creating that signal that someone has to interpret, the problem’s getting exponentially worse. When you consider that each of us has multiple devices figuring out which device to use when makes it more complicated to connect.

If you add in that most of these are global enterprises with staff in time zones, speaking different languages, with different skillsets, matching that person to the right event at the right time is impossible to do manually unless it’s going to take hours and hours to do – and people can’t afford that cost.

We are seeing that lots of enterprises are looking to solve this problem once across the entire enterprise, to tie in multiple business processes, and use that communication process to make the process go faster.

Q: What are the indirect costs to businesses of interruptions?

When you start to expand out, customers will churn – you will lose customers. Often the number one complaint from a customer and it’s not because you had an interruption, it’s because I didn’t know about it, you wouldn’t tell me about it and you wouldn’t tell me when it was going to be fixed, so out of frustration I have to leave.

We see that when you have multiple companies that are providing services to one another. Perhaps a telecoms company is providing a service for a financial institution which needs that service for an end-consumer. If that telecoms company has an issue and doesn’t inform the financial services company, customers are going to start calling the bank asking why the ATM isn’t working.

They have reputational damage and they may lose customers and accounts and deposits because of that. They create a perception that they can’t be trusted, and then they’re really upset with their provider because the provider knew there was an issue but didn’t know who were the right people to tell. When you consider these banks are tens of thousands of employees – it’s a needle in a haystack.

You have to be able to work that out using self-service, to allow people to subscribe and decide what information’s important to them so that if something does happen they know that you’re going to find them.

Q: What is the importance of customisation of these solutions?

We’ve been doing this for fourteen years. Up until 2010 or 2011 most of the communications market was hardware-based, so the ability to do the kinds of things I’m talking about would have taken an army of consultants to come in and write custom code scripts to build out the business process.

If you wanted to change it you’d have to hire the army back and review the code and change it. That’s because you’re using hardware to do that. In today’s world, because it’s cloud-based, we’re able to provide a user interface to someone is a business analyst. The idea is that someone should be able to change the business process just by clicking and dragging and publishing, and that ends up on my phone.

It used to be that you’d have to use a Cisco or NVIA to build that. It was very expensive, so lots of ideas never came to market because it was too hard and too expensive. 2011 is when we really saw the change. In 2012, from our perspective, we stopped selling software on premise and only sold cloud. It’s primarily because our customers were only happy if they were in the cloud.

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