AOL Outage May Prompt Creation of Backup Systems
For online and Internet service providers and their growing legions of customers, the massive network outage that left more than 6 million America Online Inc. subscribers offline Wednesday was an unwelcome reminder that when it comes to reliability and service, the technology industry is caught between a rock and a hard place.
On the one hand, the incredibly rapid growth of the Internet has made it impossible for many companies--including online services such as AOL, Internet access providers and World Wide Web sites--to assure quality service.
Companies must frequently undertake complicated and risky network upgrades, and it was a mistake in such a process that led to the 19-hour AOL failure Wednesday. Web sites can quickly be overwhelmed by an unexpected surge in demand--as the National Hurricane Center discovered when queries poured in about Hurricane Bertha four weeks ago.
At the same time, many of the new customers are techno-novices whose expectations are very different from those of their online predecessors.
“In the beginning, early adopters of online services often had two or three accounts” and people took outages in stride as part of cyberspace, said Peter Krasilovsky, a senior analyst for Arlen Communications, a Bethesda, Md., consulting firm. But new users don’t think that way.
“Everybody has been so spoiled by the reliability of the phone system,” said Derek Reisfield, director of strategic management at Westinghouse Electric Corp. “Everybody forgets that it took decades for that to develop.”
As America Online returned to normal Thursday, Chief Executive Steve Case apologized for the inconvenience the outage caused subscribers.
“We still have a long way to go to make AOL as reliable as must-have utilities such as electricity and the telephone,” he said. “But that’s what we intend to do.”
The company told investors in May that it was going to spend more money on technical improvements this summer. After two years in which its subscriber base grew from less than 1 million to 6 million, America Online has badly needed to update systems.
America Online on Thursday reported that its revenue nearly tripled to $1.1 billion from $394 million in fiscal 1995. Net income quadrupled to $21 million from $5.3 million in 1995. The company’s shares fell $1.50 to $33.375 on Nasdaq on Thursday.
“As the world goes digital, it becomes prone to breakdowns when upgrades happen,” said Maureen Fleming, president of Digital Information Group, a technology research firm in Norwalk, Conn.
Many customers, though, are less then assuaged by such an explanation. “My daughter couldn’t use e-mail to write to her friends all day yesterday,” said photographer Jeff Glaster of Ashburn, Va. “It’s indicative of the gross arrogance of AOL, which doesn’t seem to realize that the success of any business rises and falls with its level of customer service.”
Of course, even the telephone industry, despite its status as the gold standard in reliability, has had its problems. A series of major outages in the early 1990s left large regions of the East and West coasts without telephone service for several hours.
However, that has prompted changes. AT&T; Corp., whose network was disrupted in 1990 by a software upgrade, has overhauled its procedures. Now such changes are undertaken with the planning and precision of a military maneuver. Everyone involved must understand what the new software is expected to do. Copies of the old program are on hand to reinstall in case the new one fails.
AT&T;’s trouble gave a boost to a new group of companies that broker phone service to large companies. If one carrier goes down, service is automatically switched to another. Analyst Fleming said AOL’s trouble may prompt a similar industry to form around online access.
“If AOL is concerned about customer retention, then it will start thinking about a way to manage that, to find a backup or simulate being alive during those times when it isn’t,” Fleming said.
John Mann, analyst at Yankee Group in Boston, said he worries that fast-moving technology companies, where engineers are accustomed to a level of system failures, are colliding with their customers’ higher expectations.
“Either those guys are going to provide the resiliency or else people are going to come along with backup systems and they will win,” Mann said. “Very large networks are going to have behaviors that it’s not clear enough to me people understand yet.”
