How Bandwidth Can Affect Productivity

Many companies are finding themselves in a decision process about how much bandwidth to order. For the most part, it’s so many dollars per Megabit per second throughput. There are ways to actually get more Mbps for your bandwidth dollar, and I’ll tell you about that in a second. First, though, let’s see if there is a relationship between your network bandwidth and employee productivity.

If your only bandwidth connection is a broadband Internet service that employees use to sell personal items on eBay or play Farmville when the boss isn’t looking, you might argue that less bandwidth would be a productivity enhancer. In fact, you’d be better off disconnecting from the Internet completely. But most companies can’t do that anymore. They are completely dependent on both internal data transfers and connections to the Internet in order to conduct business. Still, what is the right level of bandwidth to install?

Let’s use an analogy to see if we can figure this out. Suppose you have a office full of sales agents. This is certainly true of insurance firms and real estate brokers. It’s also the case with many other types of business. Now, let's install one wall telephone for every two dozen agents. How much sales volume would you expect to be generated?

In such a case, you’d probably find that the telephone set would never get cold. There’d be a line of agents urging whoever was on the phone to wrap up the conversation and give others a chance. If these were salaried sales people, you’d be losing money in buckets. If they were commissioned sales people, the ranks would soon thin out from a steady stream of resignations.

Obviously you want to manage the productivity of your scarce resource, which is the skilled sales agent. You’d give them each a phone and perhaps both a desk phone and a cell phone. How about the number of outgoing phone lines? You’d install enough lines that there would rarely, if ever, be a busy signal.

This is an easy example because there is a clear connection between sales agents being able to make phone calls and the amount of revenue the company generates. It’s also generally acknowledged that high producing agents are far more expensive than telephones and phone lines. But what about other employees? Does this analogy translate to other activities?

Of course it does. It’s just when you have dozens or hundreds of employees doing all sorts of tasks, it’s harder to nail down the cost of lost productivity. You should try, though, because the loss is there just the same. Any time someone has to wait for a file transfer or access to a Web site they need to do their job, you have minutes of productivity vaporizing.

Multitask, you say? Sure, people do that all the time. If they know that it takes 15 minutes to download a particularly large image file, they might do something else while they wait. But what if it takes 15 seconds? Chances are they’ll sit back and relax or converse with someone at the next desk. Worst of all, what if your network performance is so variable that you have no idea if you’ll get that file in 15 seconds or 15 minutes? Do you start another task only to be immediately interrupted or cool your heels only to find that you’re doing nothing for the better part of most hours?

The problem is probably more insidious because these are extreme examples. In most cases, the wasted time is probably more like seconds than minutes per task. But multiply that lost time by the number of employees every day for a month and you might be surprised by how much it costs. Now, compare that cost to what you are spending on bandwidth per month and see if your telecom bill still looks outrageous.

To go a step further, consider how much more you might accomplish as an organization with more sophisticated tools that are also more dependent on Internet or cloud network connectivity. It’s a tradeoff between the cost of automation plus ongoing bandwidth & maintenance charges versus the cost of bodies in seats to accomplish the same thing. It makes no difference if your bandwidth costs are a few hundred dollars a month, a few thousand or tens of thousands. It’s what you are accomplishing for the money spent that counts.

Now, as promised, I’ll let you in on a little secret about the cost of bandwidth. It’s not the same for everyone. Pick out 10 companies, each with a T1 line or an OC3 fiber optic service, and you’ll find they’re paying 10 different lease prices. Why? Partly this due to the fact that the price of bandwidth is always changing but line leases are for a fixed time period. You also pay less if you sign a 3 year lease than if you hedge your bets and only commit to a 1 year lease. But the biggest cost differences come from what type of bandwidth service you order and who you buy it from. This can result in a factor of 2x or more in the cost of the same Mbps from one company to another.

How can you be sure you are getting the best rate on your voice or data bandwidth services? More competition is better, so using a broker who has relationships with dozens of service providers helps insure that you didn’t miss a big price break because you only got quotes from one or two carriers.

Also be sure that you compare all means of connectivity appropriate to your business. Did you know that you can get twice the bandwidth for the same money if you order Ethernet over Copper versus T1? They’re both professional grade telecom services, but one is cheaper than the other if it’s available for your location. There are copper, fiber and wireless options available for most businesses. Some services offer broadband and telephone on the same connection for a cost savings.

If you are losing money because your systems are bandwidth limited or you suspect you are paying more that you should for a particular level of service, then by all means get current competitive bandwidth quotes and see what’s available. You can do this quickly and easily through the Telarus telecom brokerage service and get complementary consulting help as well.

The Need for Low Latency Networks

When we think of network performance, we tend to think of bandwidth. After all, bandwidth equals speed. The faster your network runs, the faster your can transfer files from place to place. The faster those data transfers go, the more work can be done. That can also translate into bandwidth equals productivity. But there is another characteristic of network performance that is getting attention as of late. That is the matter of latency.

What is latency? It’s the time delay in the network. In other words, how long it takes to get a packet from node to node. You might be inclined to think that latency has something to do with bandwidth, but they are quite different characteristics.

Here’s an example. Suppose we are transmitting a data stream up to a satellite in geosynchronous orbit. One application is video feeds from the other side of the world. You see them on the TV news every night. Have you noticed that there is a slight delay in the connection? The TV anchor has to wait a second for the reporter to reply or they’ll talk over the top of each other. That pause is latency. It has to do with how long it takes for the signal to go up to the satellite and back down to the far location.

Now, how much do you suppose that it would speed up the television feed if we doubled the bandwidth? The answer: Not at all. As long as you don’t have packets waiting in a queue because of insufficient bandwidth, doubling, tripling or making the bandwidth 100x won’t speed up the circuit at all.

Why? Because the radio signal traveling thorough space is already at the speed of light. The Einsteinian limit of 186,000 miles per second sets the threshold on how low latency can be between point A and point B. You can’t make the signal go faster, but you can sure make it go slower.

Signals traveling to satellites in space go slowly enough. If you have a satellite Internet connection, you know that quite well. VoIP is impossible unless you want to use your connection like a walkie-talkie. Only one person can talk at a time and then wait for the other to reply. That’s called half-duplex. We’re used to full duplex, where two people can talk at the same time and still hear each other without interruption.

Low latency was inherent in the analog telephone system. There was very little but wire connecting two telephone sets. It takes maybe a millisecond to go a hundred miles. The same is true for TDM (Time Division Multiplexed) circuits such as T1 lines. You lose a little in the conversion process, but the synchronized channel propagates as fast as the signal can travel in copper wires or glass fibers.

So, what slows things down on the Internet? It’s all those routers between source and destination. Each one adds some milliseconds or fraction thereof to the process. Get a dozen or more routers between you and the other end of the transmission, and you’ll notice the latency building up.

Sometimes latency is important and sometimes it isn’t. The Internet was designed for things like scientific data file transfers and email. Neither of these applications is going to be much affected by a few dozen or hundred milliseconds of latency. It wasn’t until real-time interactive applications came along that anyone really took note of the latency issue.

What is latency sensitive? VoIP telephony for sure. Even so, 100 ms is considered quite workable for phone conversations. That same 100 ms can be a real annoyance to real-time gamers who might find the small but noticeable lag between action and reaction to be annoying. But 100 ms can be the difference between profit and loss in high speed financial trading. With new financial centers being built and traders increasingly using computers to automatically place their trades, the subject of networking latency has become a hot topic for very high speed networks.

So how do you decrease the latency on your network? First, forget the Internet or anything modeled after it. The Internet was designed to be self-healing, so it will route your packets any which way it can to get them to their destination. The lowest latency networks have high speed fiber in as straight a line as possible between locations. There is also as little equipment as possible between end points. Signal regenerators may be needed, but switches and routers need to be minimized. Whatever switching and routing equipment does exist has to be designed to minimize latency by running as fast as possible internally and doing a few functions as absolutely necessary. The more you process a signal, the longer it takes.

If low latency it essential to your operation, you need to specify that. Just saying that you want a 10 Gbps connection will guarantee you bandwidth, but not necessarily the lowest latency possible. Many major carriers are sensitive to the needs of financial trading and other businesses where network latency makes a difference. They offer special low latency network connections designed specifically for those needs.

Do you have a low latency requirement for your business? If so, be sure your say so when you check high bandwidth network service prices and availability for your locations.