Cloud Economics 3: The Value of Timeliness

The other day at our local supermarket the line seemed to be going slower than usual.  When it came my turn to pay, I realized why.  The store had “upgraded” their debit card readers, and the new type of machine was agonizingly slow.  Instead of the usual one second to read my card and tell me to enter my PIN number, the thing took at least three whole seconds.  Then it took an additional couple of seconds to calculate and complete the transaction.

Now you might think I’m making a big deal about nothing, but don’t we all expect instant response these days?  There is an enormous value in timeliness, especially when you are providing a service.  The “single most important factor in determining a shopper’s opinion of the service he or she receives is waiting time,” according to Paco Underhill, CEO of Envirosell, in his book Why We Buy.  He continues, “… a short wait enhances the entire shopping experience and a long one poisons it.”  This insight was quoted and expanded on by Joe Weinman in his book Cloudonomics.

Wienmann points out the direct relationship between timeliness and the bottom line.  For example, he quotes a recent Aberdeen Group study showing that a one-second delay in load time for a web page causes an 11% drop in page views, which cascades into a 7% reduction in conversions (people taking action), and a 16% decrease in customer satisfaction.

Well below the one-second benchmark, new interactive abilities on the web compete to beat the speed of human reaction time.  Since I can type fairly quickly, I’m not a big fan of the Google pop-down suggestion box, but you have to admire the technology.  For the first letter you type, it goes out and finds a list of the most-searched words.  Each new letter modifies the list, completing a round-trip message to the server before you can even type the next letter.  How’s that for quick service?  No wonder I get frustrated at the supermarket.

Computer-to-computer communication operates at still finer magnitudes of scale.  For example, one of the colocation/cloud data center services provided by the New York Stock Exchange guarantees a round trip time for data at under 70 microseconds.  That’s just 0.00007 seconds.  This speed is highly valued by the traders who use the service, and they are willing to pay a premium for it.  It’s basic cloud economics.

Wonderful as all this is, Weinmann points out that there are limits to how quickly data can travel over a network.  Once you are already sending bits close to the speed of light through a fiber optic cable, the only other ways to speed things up are to move closer to your data source, and/or optimize your processing.  Whatever it takes to achieve it, faster reponse time means less wait, more satisfied customers, and more cash in the till.

Real-time cloud computing is all about the value of timeliness.  People who are watching and interacting with real-time processes expect at least the same kind of responsiveness as you get with Google.  When you click a button or adjust a gauge, the value should change immediately, not after 2 or 3 seconds.  All of this is possible when the core requirements for real-time computing are implemented, particularly those for high data rates and low latency.

How to move large quantities of rapidly changing data through the cloud, and allow meaningful user interaction in the 200 ms range of average human response time is a problem for the software engineers and techies to grapple with.  What is clear is that everyone—be it a customer waiting at the checkout counter, a manager viewing plant data, or a highly energized commodities trader—everyone at their own level knows the value of timeliness.