Market Volatility Serves as a Reminder that Technology Volatility Can Hurt Your Business, Too

Last week was a crazy week for the stock market.  The past two years have seen dramatic changes in the world – Brexit, the election of the current administration, a government shutdown and finally the North Korean nuclear crisis.  Through it all, the market had virtually no reaction.  Nearly every sector of the stock market continued a slow, steady march towards ever-higher valuations and P/E ratios, with almost no volatility.  Now, for reasons that nobody can pinpoint, the Dow Jones Industrial Average has dropped 7.5% since the beginning of February, and volatility has tripled compared to its yearly average.


Part of what’s so unusual about this is that it’s not clear what’s causing the volatility – while there have been plenty of opportunities to panic in the past two years, there doesn’t seem to be one right now.  While stock market volatility usually comes from clear events, however, that’s not always the case for technology volatility.  Even the best proactive maintenance can’t prevent all failures.  Sometimes hard drives suddenly fail, sometimes power supplies just stop working, and there’s often no warning when power is lost.  In fact, you may never know why your hard drive decided to fall over dead right before that major presentation.

One thing that the markets and your network do have in common, however, is that contingency planning can save you from black swan events, even if they happen when they seem least likely.  Are your backups tested regularly?  Do you have any redundancy in your internet plan?  What happens if your primary domain server fizzles?  Just like a stock trade that’s hedged or collared, these contingency plans sacrifice some revenue for protection against the worst that could happen.  Because, while the worst doesn’t happen to everyone all the time, it does happen to someone – and eventually, that someone will be you.

A financial planner and a Managed Service Provider (MSP) are similar, too. In order to know what contingency plans make sense for your company to make, both your financial planner and your MSP have to actually understand your company.  They need to know your definition of success, your event horizons, and your appetite for risk.  If all a financial planner ever does is trade stocks for you, they aren’t earning their fees.  And if the only thing your Managed Service Provider does is install hardware and software and replace it when warranties expire, they aren’t earning their fees, either.

So how well does your Managed Service Provider understand your needs?  When technology volatility strikes your office, are you confident that your risk is adequately hedged?

To learn how WingSwept will help you manage risk and maximize your use of technology, call us at 919-600-5102 or email us at Team_WingSwept@WingSwept.com.