How to Avoid Network Latency that Costing You Money

It’s one of the oldest phrases around – “time is money” – and as the CEO of a small business, you’re probably more aware of that than most others.

In business matters, dealing with the hours, days and weeks usually suffices in relation to achieving targets – but what if we told you that increments as small as milliseconds could be impacting your business in ways you hadn’t even considered? Network latency is measured in these tiny fractions – and it can mean the difference between good and bad customer interaction.

Network latency

Why milliseconds count

In our modern world, we’re still happy to wait 20 minutes for a meal, 5 minutes for a taxi or a couple of minutes for our latte to arrive – and when questioned, it’s because people say they perceive the physical item and can understand and appreciate the process required for it to arrive in front of you.

But what about data?

There’s a perception that data is not real, there’s no process involved with displaying it to you. This is a misconception that costs businesses a lot of money!

Big business has a lot to answer for here, using words like ‘instantly’ and ‘immediately’ when referring to accessing data sets customer expectation very high – and the result is alarming; when browsing online, customers will almost always hit the ‘back’ button in their browser if a website takes more than 7 seconds to display.

Think about that! A web page or application that could carry untold amounts of data – and it must be with you in a matter or seconds – or you’re going elsewhere!

This attitude spreads

More and more customer satisfaction surveys note an increasing impatience for services that customers feel should be instantaneous. A person will see a short hold time of 1 minute as being acceptable when dialling a call centre – but would often subsequently voice dissatisfaction if they’re told their information will take 30 seconds before it is displayed on customer service team member’s screen.

There is an unrealistic timeframe associated with digital data interactions – and I’m sorry to tell you, your company can’t change that, you can just do your best to deliver in a reasonable time!

How your IT speed is impacted

IT network latency is fairly easy to understand when you think about data as a ‘real thing’. No connection in the world can instantaneously transfer huge chunks of data intact. Instead, an application breaks this information down into ‘packets’ – tiny bundles of data that, when reassembled, form an understandable piece of information; whether that’s a movie, a document, a website or any of the millions of other pieces of digital information we send and receive.

Latency refers to all the things on that data’s journey that hold up its delivery.

Network speed

First and foremost, there’s distance – usually between two points on the globe via a satellite in orbit. There’s no beating the speed of light, so distance is a speed factor – referred to as a ‘propagation delay’.

There are also ‘nodal delays’ – this is when your data hits a device somewhere on its path from start-point to destination. This could be a switch, router or similar – and each of those devices needs to take a quick look at the data and decide what to do with it. When we say quick – we really do mean quick, a matter of milliseconds – but these all add up – especially when you remember your customer’s expecting ‘instant’.

Bandwidth and throughput

Every network has a maximum bandwidth. This is the overall amount of data it can handle at one time. The level of data running across a network is referred to as the throughput. When propagation and nodal delays add up, it means throughput is upped as the sending speed overtakes the travelling speed – and when it reaches the maximum bandwidth that the application can access – it causes congestion.

Almost inevitably, the lowest levels of bandwidth are found in your businesses network – and they should absolutely be adequate for your requirements – so generally speaking issues with speed are going to lie with your applications and network design.

When you get congestion, the sending and receiving applications try to ease the burden before the network becomes overloaded and systems fail. To do this they drop packets of information – meaning the data being sent starts to degrade. This might not be noticeable for some applications – but when you’re dealing with real-time services – this will quickly lead to system being unusable.

Wider implications

So, latency will lead to systems being unresponsive, crashing and end-users having issues. But you can restart, delay things until that file is sent or that video conference call is done can’t you?

Let me remind you:

7 seconds. That’s the time people expect to have the world of information at their finger-tips. Even if they’re polite when they’re dealing with you and your slow IT systems they will vote with their feet if you can’t give them what they want. So why take the risk when latency can be something easily remedied?

Slow moving queue

What does latency mean to your business?

That 7 second timeframe of impatience is an important one to keep in mind when you’re thinking about latency – because you’re only ever going to be talking about small numbers. The difference between data coming from the room next to you and a satellite 20,000 miles above your head is less than a second – but when the different types of delay add up, that’s when customers, end-users and applications start to have problems.

Something that’s really important is that more and more businesses are relying on their data network to support voice calls, video and other time-sensitive applications. In these situations, delays of several tens of milliseconds (and sometimes just changes in the delay) can start affecting the performance of the application and the experience of the users. Moreover, because of the way that internet traffic is controlled, higher latency means less throughput … ie less traffic being handled by your network. This can cause real problems with communication across continents where latency is naturally higher.

You can assess your network’s latency by using a tool like this one, provided by a company specialising in global communications and latency reduction. When you’ve got an idea of latency levels across your network – you can start thinking about how that might impact your business and the experience of those who interact with the organisation.


Time does indeed equal money – and the tiny increments count more than most people think. When you can deliver a service that stands up to most people’s exaggerated expectations you can be sure that your IT network is doing everything possible to help drive your business forward – and not costing you business because of missed seconds and slow applications…


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