Investment in a cache is usually easy to justify:
- Where bandwidth saving is a key driver and extra bandwidth is moderately expensive or worse, a quick calculation demonstrates the benefit in simple cash terms. Rapid payback often makes it a no-brainer.
- If user experience is the issue rather than bandwidth per se, then calculating the benefits in money terms is more complicated, but a compelling case based on other measures is often obvious.
Bandwidth savings translate directly into financial benefits as they allow you to a) use less bandwidth on a metered connection, b) delay bandwidth upgrades or c) make money by fitting more users onto existing connections.
Say you use 10Gb per month at a cost of $500 per Gb, so your monthly cost is $5000. You estimate that 30% of your content is cacheable so:
Savings = $5000 x (30/100) = $1500 per month.
With CACHEBOX, you’d see payback in just a few months and save $18,000 per year thereafter.
It’s not all about cash savings, caching can help you to grow revenue too. If you have 1500 customers each spending an average $25 per month and you expect your hit rate to be 35%, your current monthly income is $37,500 and caching could help you make an additional $13,125.
1500 x $25 = $37,500 current income
$37,500 x (35/100) = $13,125 additional monthly income
That’s over $150,000 per year, dozens of times higher than the cost of an average CACHEBOX.
When user experience is the key driver, there will often be metrics which establish compelling reasons for investment. In addition to bandwidth savings, you can typically provide a speed increase for customers of around 20-50%. An increase of this magnitude leads to:
- Increased customer satisfaction rate
- Reduced churn-rate
- Lower marketing costs
- Potential to increase Average Revenue Per User (ARPU).