DataBank Establishes $725M Financing Facility to Support Growth. Read the press release.

What’s Driving the Demand for Microsecond Latency?

What’s Driving the Demand for Microsecond Latency?

  • July 21, 2023
  • Blog

Loading audio...

What’s Driving the Demand for Microsecond Latency?

Milliseconds No Longer Suffice in Today’s Accelerated Digital Environment

By Gregory Ryman, DataBank Solutions Engineer

Application and database latency are critical factors for enterprises across many industries. A delay of mere milliseconds can break a business when it comes to financial transactions, real-time data analytics, and online gaming. As a result, the demand to reduce latency is on the rise. Whereas milliseconds were once acceptable, microsecond responses are now required.

The first step in solving the latency challenge is understanding the drivers behind the demand for faster response times. In this blog, we delve into five use-cases that illustrate the factors fueling the need for microseconds over milliseconds. We also examine how data center colocation companies play a pivotal role in meeting these evolving requirements.

Use-Case #1—High-Volume Trading: Every Nanosecond and Microsecond Counts

In the realm of high-volume trading, microseconds are the new currency. (A microsecond equals one one-millionth of a second) Financial institutions rely heavily on lower-latency connections to gain a competitive edge in executing trades.

This has driven the need for closer proximity to major exchanges and trading platforms and has led to the rise of specialized data center colocation facilities—strategically located near financial hubs. These facilities provide low latency connectivity, enabling traders to capitalize on market opportunities faster, mitigate risks, and improve overall trading performance.

Use-Case #2—Cloud and Edge Computing: Revenues Rely on Superior User Experiences

The proliferation of cloud computing and the emergence of edge computing contribute significantly to the demand for reduced latency. In industries such as e-commerce, online gaming, and streaming media, even a few milliseconds delay can result in a subpar user experience—leading to lost revenue and diminished customer satisfaction.

To solve this challenge, data center colocation providers strategically position their facilities near major network interconnection points, reducing the distance and necessary network hops between end-users and cloud resources, resulting in faster response times and higher throughputs. Many cloud service providers host applications and store data in these large-scale data centers to reduce latency for users accessing compute resources, providing an improved customer experience with higher customer satisfaction..

Use-Case #3—Internet of Things and Analytics: Real-Time Decision-Making Required

The rapid growth of Internet of Things (IoT) devices and the need for real-time analytics further intensify the demand for reduced latency. Industries such as manufacturing, healthcare, and logistics rely on IoT sensors and devices to collect and transmit data in real-time. This data is often processed and analyzed to make immediate decisions, monitor equipment performance, and optimize supply chain operations.

With the increasing volume and velocity of data generated by IoT devices, minimizing latency is crucial to ensure timely insights and actions. Data center colocation companies, equipped with robust network connectivity and edge computing capabilities, answer the challenge by offering the infrastructure to process and analyze data closer to the source. This will enable real-time decision-making of the future, such as managing smart cities and edge-based infrastructures for oil and water pipelines.

Use-Case #4—Interactive Applications: Streamlining Productivity and Collaboration

End-users are accustomed to instantaneous responses from the applications they use daily. Whether it’s a messaging app, video conferencing, or online collaboration, users expect seamless and lag-free experiences. Any delay or latency can hinder productivity, collaboration, and user satisfaction.

To meet these heightened expectations, companies developing interactive applications seek data centers with high-performance networks and fast interconnections. By locating their infrastructure in these colocation facilities, software development firms can deliver superior experiences and retain users to gain a competitive advantage.

Use-Case #5—Emerging Technologies: Seamless, Future-Proof Functionality

As technology continues to advance, new applications and technologies will demand even faster response times. Innovations such as augmented reality, virtual reality, autonomous vehicles, and 5G networks will rely heavily on low latency to function seamlessly.

Colocation providers with advanced infrastructure and connectivity options are positioned to support these emerging technologies. By deploying infrastructures in these data centers, enterprises can future-proof their business and ensure they are well-equipped to embrace user demands.

Colocation Data Centers Play Key Role

In today’s digital landscape, microseconds matter. That’s why enterprises across almost every industry are increasingly prioritizing reduced latency to gain a competitive advantage, enhance user experiences, and drive business growth.

Data center companies play a vital role in meeting these evolving demands. By strategically locating their facilities, investing in high-performance networks, and embracing edge computing, colocation providers offer the infrastructure to minimize delays and enable real-time data processing and transmission. As the demand for microseconds over milliseconds continues to grow, enterprises can rely on colocation data centers to provide the required low-latency connectivity to thrive in today’s fast-paced, interconnected world.

To learn how DataBank can help your business leverage the benefits of reduced latency and enhanced operations to stay ahead of your competition, contact us today.

About the Author: Gregory Ryman has had the pleasure of working in the hosting and data center industry for over 20 years in support roles and director level engineering positions. His passion for technology is rooted in a lifelong pursuit of continuous learning and building meaningful solutions that solve real world problems.

See these related articles:

What Will IT Infrastructure Look Like in 10 Years?

Start Designing for Portability – Right Now

Avoid a “Frankenstein” Hybrid IT Infrastructure: Proactive Planning and the Right Partner Make All the Difference


Share Article


Discover the DataBank Difference

Discover the DataBank Difference

Explore the eight critical factors that define our Data Center Evolved approach and set us apart from other providers.
Download Now
Get Started

Get Started

Discover the DataBank Difference today:
Hybrid infrastructure solutions with boundless edge reach and a human touch.

Get A Quote

Request a Quote

Tell us about your infrastructure requirements and how to reach you, and one of the team members will be in touch.

Schedule a Tour

Tour Our Facilities

Let us know which data center you’d like to visit and how to reach you, and one of the team members will be in touch shortly.