Latency is the amount of time it takes for a packet to traverse the network

Latency vs. Bandwidth

Why is it important?

 If it takes a single packet 100 ms to travel from location A to location B, adding bandwidth will not make it any faster.

Application considerations for latency:

1. Application turns
2. Acknowledgements
3. Window size
4. Data loads
5. Load Balancing 

Application Turns:

1. If an application has a high number of turns, the application’s performance will deteriorate rapidly as latency is introduced
2. Sample capture of application transaction 

Conclusion:

When latency is a factor, the number of acknowledgements required could become a limiting factor to performance. Example: Data sent to London that requires each packet to be acknowledged with a latency of 95 ms is limited to throughput of 11 packets per second. 

Sliding Windows set too low:

If the sliding window is set too low, it can have similar impacts as acknowledgements. Example: Every 3^rd or 4^th packet acknowledged. 

Small data loads in packets:

The more packets that need to be transmitted the greater the impact of latency.

Sample intranet application transaction response time over varying bandwidths and latencies:

Login Response Time per Bandwidth & Latency