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Guest View: Where milliseconds matter

Henry Bohannon | Nov. 6, 2013
Low latency networks going mainstream

Traditionally, low latency networks were built extending directly into the data centres where electronic trading is taking place to achieve the highest possible speeds for financial transactions. While this solution fits well with financial firms, the electronic trading centres may not fit the needs of other industries.

What is being monitored?

Customers need to be cognisant that the overall circuit performance is very important. Continuous measuring of latency is critical, but packet loss and availability are also factors that need to be monitored. The service level agreement (SLA) proves how confident the provider is in their network. Companies with good SLAs monitor the latency of their network every second, while online reporting refreshed every minute allows customers to visualise link utilisation, packet loss, availability and jitter to ensure the link is operating at top performance.

Do you need diversity?

What is your business model? How much diversity or availability do you need? Do you only need one unprotected link with the absolute lowest latency or do you need low latency with high availability? In some regions, the lowest latency may be on a route that has frequent outages. Low latency networks are often sold as unprotected; the customer can purchase multiple links with the best latency and perform their own protection switching keeping direct control of the latency performance. The customer business model will determine the risk and the amount of effort that needs to be invested for building a network that achieves the best results.

Do you only have low latency needs?

Some network providers specialise only in low latency networks, whereas others may also offer standard networks that are not purpose built. If you do not require low latency to every location, then working with a provider that operates multiple networks will save you money. This is true, especially for multipoint services. Providers who operate multiple networks can deliver a single multipoint solution over multiple networks, delivering the best solution for the best price.

Other factors to consider

Low latency networks do differ in cost and speed. Is the extra speed worth the extra cost? What about security? Will your data be secure on the service provider's network? The financial strength of the service provider is also important, especially if you are running a significant part of your business on the network being provided. No one can afford to wake up one day and find that their service provider has gone out of business and their network is permanently down.

The low latency market is expanding beyond the traditional financial institution user. On the surface, low latency networks appear to be all about one thing, latency. In reality, new and old low latency users need to ask a number of questions to identify what they need, the risk they can afford and what the best solution is for their requirement. Networks are a vital part of a company and often, the revenue generators for the company. A company with the best network, the best price and with acceptable risk will successfully maximise revenues and efficiencies.

Henry Bohannon is Senior Director, Head of Ethernet Product Management, Tata Communications.


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