Exploring Low Latency – What It Is and Why It Matters

Latency refers to several types of delays typically incurred in processing network data. These include propagation delays, transmission delays (properties of the physical medium), and processing delays.

What is Latency?

Latency is the time it takes for a data packet to travel from one point on a network to another. This includes how long it takes for a web page to load or how long it takes to connect to a server in an online game.

This concept can be difficult, but it’s important because it can make a big difference in the user experience. For instance, low latency can help you get information faster using a web application or device. It also helps ensure that things like jitter don’t negatively impact your experience. Typically, the distance between the client devices that send requests and the servers that receive them is the primary driver of latency. But it’s not the only factor, and plenty of other things can increase or decrease the time it takes for data to travel back and forth across a network. These can all be significant problems, making it much harder for users to receive the information they need and potentially negatively impacting their overall experience.

For this reason, it’s essential to keep this in mind when choosing a networking solution. The importance of low latency isn’t limited to technology, however, and it’s vital for businesses and individuals alike. Low latency is crucial for data and communications, including video, live streaming, or simple file transfer.

Why is Low Latency Important?

Latency is a metric that measures how long data packets travel from one point to another. It’s important for the end user and system architects because it impacts how quickly network packets can be processed and sent back to users. Some different factors impact network latency. These include the geographical distance between a server and a client, the type of transmission media used, and the size of the data packets sent from the sender to the receiver.

The time it takes for data to travel from a server to a client is called the round trip time, or RTT. This is usually measured by sending test packets to a specific IP address and measuring how long it takes for the test packets to arrive at their destination. Ideally, network latency should be as close to zero. That’s because small delays can make it hard for web pages to load or interrupt streaming video and audio. In addition, it can cause network performance issues that affect the speed and efficiency of other connected systems.

In many industries, low latency is vital for a positive user experience. For instance, cybersecurity requires low latency systems in the public sector to detect anomalous behavior and suspicious activities instantly. This prevents hackers from carrying out attacks and flagging them for investigation before they can do damage. That is why many industries explore how to lower latency to monitor suspicious activities effectively. 

Hospitality: Hotels can use low-latency solutions to monitor real-time reservation activities. This provides valuable information about attracting more guests by offering special offers at certain times of the day or night.

Financial Services: Banks can use low latency systems to track customers’ banking app activities and offer attractive insurance, loan, and credit card offers. This also helps banks automate their application processes and integrate all internal and external applications to save time and money.

What are the Benefits of Low Latency?

Many applications, such as voice telephony, video conferencing, and online gaming, rely on low latency to operate smoothly. Moreover, applications requiring accurate timing, such as competitive games and online trading, are essential. Businesses that rely on low-latency connectivity can deliver more timely data to their users, leading to increased customer satisfaction and better conversion rates. For example, a single second delay in loading time can result in a loss of up to 10% of e-commerce sales. Another major benefit of low-latency connectivity is maintaining a secure and reliable connection that prevents hackers from compromising your company’s sensitive data and damaging its reputation. For this reason, companies need to invest in security-conscious solutions such as encryption and firewalls.

What are the Challenges of Low Latency?

Network latency is the time it takes for a device to send and receive data packets from a server. This is measured in milliseconds and can cause problems for businesses that must communicate rapidly. Low latency is essential for many industries, including retail, telecommunications, banking, and healthcare. It can also help improve the customer experience and drive targeted marketing campaigns.

Retail: By capturing point-of-sale or clickstream data and processing it in real time, retailers can improve the customer experience and drive targeted marketing campaigns by providing the right offer at the right time. They can also optimize the efficiency of their business processes by integrating all internal and external applications (e.g., CRM, ERP, ecommerce portal, mobile application, supplier portal, payment application) with low latency systems.

Telecom: Telcos face severe challenges as digitalization, and OTT platforms disrupt their industry. They need to reduce customer churn and retain customers with low latency solutions that can capture customer location data, network information from towers, and weather data in real-time to predict service disruptions and proactively notify their customers with SLA via SMS or emails.

Cryptocurrency exchanges have a similar problem with latency, as they need to be able to process transactions and update the price of their products in real time. This is crucial for traders who use these services to make money by detecting and exploiting market inefficiencies. The latency of a cryptocurrency exchange can vary widely, depending on the specifics of the organization. An extensive, well-known exchange can afford the latest technology to provide the lowest latency possible. Smaller exchanges might have a lower infrastructure level and need faster performance.