Leibson's Law

Processor clock rates leapt from a few MHz to a few GHz over the past two decades and we’ve become jaundiced about speed. “How much speed do you need to run Microsoft Word?” is the frequently asked question. I’ve just finished a couple of days at Denali’s MemCon 09 conference and will be writing more about what I learned there. For now, here’s a counterpoint to the increasingly relaxed attitude towards speed. Think servers.

In his Tuesday keynote, Numonyx CTO and VP Ed Doller cited the following three server statistics, which quantify the value of system speed:

• Amazon found that 100 msec of extra server latency costs the company 1% in lost sales. (Amazon’s 2008 annual report put sales just north of $19 billion a year. You do the math.)
• Google says that an additional 500 msec of delay in Web searches will drop search volume (and therefore Google ad sales) by 20%. (Google’s 2008 sales were $21.8 billion. You do the math.)
• Financial services research and advisory firm Tabb Group estimates that a computerized trading platform with an extra 5 msec of latency relative to competing brokerages will cost a stock brokerage 1% of its sales or $4 million per millisecond in missed trades. (Now turn that around to compute how much additional sales you get by being 5 msec faster than the competition.) 

How much speed do you need to run Microsoft Word—indeed.