Rick: Hi, this is Rick Gretsch. Thanks for joining me today. I'm Vice President of Soyo Router Product Management for Digi International. Today, we're gonna talk about failover and particularly using cellular LTE as a failover device.
When we talk about failover, what we're talking about is an alternate network as a backup to your primary network. And it's something that you wanna do on an automatic basis, and you want it to happen instantaneously. And you want the network there in standby mode when you're not using it.
So the question that a lot of people have is, what's the best failover connectivity option? And so in the current environment, cellular LTE makes a particularly good failover option for a lot of reasons. So first, the speed of LTE matches most wireline speeds. Cellular coverage is fairly ubiquitous, and cellular is also an affordable option. The negative side of wireless, it's important to know that oftentimes, your backup wireless connection uses the same infrastructure as your primary. And in the case of cellular, you have a totally diverse alternative, so the networks don't share any common points of failure. So that's another reason why we think cellular makes an ideal backup connectivity option.
So why do you need failover? Well, the obvious kind of stuff. It minimizes risk and cost to your business, maintains productivity of your staff and your facilities, and it protects your business operation. Voids, the kinda things that you would naturally think about. Loss of revenue, loss of productivity, impact on your brand and customer satisfaction, uses your staff to the fullest ability plus expensive software, and other capital investments that you might have.
In November of 2017, we did a survey of retail managers and supervisors in stores that had 1,000 to 10,000 employees or more. And so why did we pick retailers? Well, retailers, as it turns out, earn 30% of their annual revenue between Black Friday and Christmas. So if you're a retailer, you're gonna make or break your year in those short period of time. So keeping your stores up, your network up is critical. So the results of the survey showed some interesting things. First off, most retailers do have a backup option. Only 20% do not have a backup connectivity solution.
And the way it's split out was 23% had a second landline solution, 50% use cellular, and 30% use satellite. And over time, what we found is more of those backup solutions are shifting towards cellular options and away from satellite and landline options. Of the retailers that we surveyed, 81% had at least one outage per year. 87% of the retailers waited four hours or more to solve the network problem. And 56% of the stores would be closed in two hours. And the primary reason why they closed as you'll see shortly is they just...they cannot operate the store without their network connectivity. Sixty-one percent are unable to process credit cards, 82% reported negative customer experience, 72% reported loss of sales, and 36% were unable to run their security software and felt more prone to data breaches.
So here's some of the other things that retailers can't use. Seventy percent weren't able to use in-store digital signage. Half were able to enable their security systems. Over 80% always take measures in high volume times, for instance, that Black Friday window, Black Friday to Christmas. Nearly one in three report when their network's down. They believe that their brand reputation suffers because of the bad experience.
Then we also...this is an outside survey that I'm showing you here, and this talks about the cost of unplanned outages. And, of course, the cost of an unplanned outage varies based upon the size of your network, the size of the location that was impacted, those types of things. But suffice to say, the cost generally is trending up over time, and it can cost anywhere from hundreds of dollars a minute to tens of thousand dollars a minute.
So the advantage of LTE cellular is what I referenced before, is it totally bypasses the wireline infrastructure. So your backup does not share any common points of failure as it would with two wireline infrastructures, a primary and a backup. The other advantage you have is there is multiple nationwide carriers, so you're able to pick a primary cellular carrier and an alternative carrier. So if there was an issue with the primary Digi routers are able to have SIM cards from two carriers, and will automatically fail from the primary to the backup. There's cost-effective pricing plans for cellular that are flexible, and they're also pooled data plans that you could use across multiple locations in order to optimize your cellular spend.
The other thing that's quite important is being able to select the speed that best meets the needs of your particular business. And so LTE speeds vary based upon category, and Digi's enterprise routers allow you to select the modem that is appropriate for your needs all the way from what's called a category four all the way up to a category six. So you can select the speed that you need and the one that most closely matches your wireline network.
You're able to also deploy cellular to sites where they have limited wireline access. So maybe you're able to get a wireline, but there's not a second carrier to provide you a backup. And you can use your cellular connectivity for store relocation. So you can move stores rapidly, bring it up under cellular. And then when the wireline is installed, you can fall back to the wireline as your primary. And then lastly, all Digi products are able to be monitored for usage and availability from a central platform to allow you to manage for optimum uptime, and also to manage your cellular usage.
So, again, what is Digi failover? We have a number of Digi products including our traditional Digi products as well as the accelerated Digi product that focuses more on enterprise space. And again, the things we do there is we automatically detect a network outage of your primary network. Our equipment automatically fails over from the primary to the wireless backup. And as I mentioned before, we support dual SIM cards. So if there is a problem with your cellular carrier, we'll even fall over one more step to the alternate cellular carrier.
Digi products have a feature called SureLink. And what SureLink does is two things. One is it's always monitoring that connection. And if there's ever an issue with that cellular connection, it'll put the device into automatic reset, so no intervention required, no on-site people required. It'll automatically put the device into reset mode and regain that connection. And then the second thing we're able to do is we're able to failover from one carrier to the next. So if you have a primary carrier, and here I'm showing it in SIM slot one. If there was ever a problem with that carrier, we would detect that and we'd automatically failover to the carrier in the SIM slot two.
The other thing we do with Digi's enterprise products is we allow our products to be installed very easily, and we mount them, like wireless access point, usually on the ceiling, but you could do it in the place where you get your strongest connection. So one of the things that we've noticed is that typically, where people keep their telco equipment or router equipment is in a secure place, lots of times behind a steel door, or a cement wall, possibly in a basement. Not necessarily the best place to get a cellular signal.
So what we do is we mount the device where you get the best cellular signal, and we ship our products with a temporary battery pack so that you could do a site survey. Do a site survey in the location, find the best place to install it, and then we also ship our products with a PoE injector so you can jet power off the Ethernet line. And you don't have to mount the device where there is an AC power plug. So our motto is always to try to put the device where you get the best cellular signal, try to make bad signals good, make good signals great, and that's the best way to have accessible installation of our products.
The other thing about Digi's enterprise products is we co-exist, and we integrate well with other people's equipment, and we provide a number of interoperability guides. So if you wanna install it with Sonic Wall, or a Cisco product, or a Juniper product, not only do we tell you how to configure our device, but we also tell you how to configure the other party's device.
So in summary, what we recommend customers do to provide backup is to have wire and wireless work together for uninterrupted connectivity. We believe that failover is essential for business operations. We believe that cellular LTE is the best way to provide backup because it has the reach, the speed, and the reliability. And Digi has a robust set of failover solutions, both in the enterprise space as well as the industrial space.
Thanks very much for your attention.