The internet is an attractive tool because its connectivity opens up the entire world as a potential new market for entry. At Dyn we have done our own studies that show consumers are willing to spend money across borders, which creates an exciting opportunity for businesses with global aspirations.
In the past, barriers-to-entry in new markets have included language translation and local regulations. With the internet, the hardest issue to overcome is performance. This issue is compounded when what you deliver over the internet is large, video for example. A bad customer experience is the universal language.
Netflix recently experienced this firsthand with their expansion into Africa. Serving their content outside of the continent led to a lot of buffering and a poor user experience. This is why the media titan just announced that they have opened their first datacenter in Africa. Based in Nigeria, this infrastructure now contains the entire Netflix content library, which should reduce latency within Africa and increase performance. Improved performance leads to happier customers and more revenue.
Not every company is Netflix, however, and can afford to spin up new infrastructure in untested and emerging markets. So how do they solve potential performance issues without breaking the bank?
Easy. By optimizing assets they are already using through the leveraging of Internet Performance Management tools.
There are a lot of reasons to do this, most notably cost. While emerging markets are attractive, the potential sometimes needs to be put into perspective. Nigeria is by far the largest economy in Africa with a GDP of approximately $490 billion US. The next four are Egypt ($330 billion, South Africa ($312 billion), Algeria ($172 billion) and Morocco ($103 billion). The rest of Africa is smaller than these top five combined. California's economy, by contrast, is larger than the entire continent of Africa.
This is why it might not make sense to build expensive infrastructure in Africa, when the core of your business is based in San Francisco.
So let’s say you are a SF-based company using AWS as your cloud provider and you were interested in reaching new users in Cairo, Egypt, Africa’s second largest market. If your content was being served from your server in San Francisco, your performance would be poor.
That 214 milliseconds is for only one round trip time for a connection or to retrieve an average size piece of data. And this could be happening multiple times in a web page load, file download, or video stream, so it can add up to many seconds of delay and seriously affect the customer experience.
However, if you’re interested in the African market then you’ve most likely explored Europe already as well. So say you also have an AWS location in Dublin to reach the UK and western Europe with.
By leveraging your AWS location in the UK, you have cut your latency in half. Perhaps not perfect performance but much better. And that is only assuming you’re willing to operate solely in the AWS universe. Not all cloud providers are created equal, and there are many benefits to having a multi-cloud approach.
Of course, you cannot benefit from these options if you don’t have insight and visibility into your cloud provider’s global performance. This is why having Internet Performance Management tools that can give you that visibility is such an important part of a strategic global expansion plan.
When you see the infrastructure investment Netflix is making in new markets. The message is clear: ensuring performance is optimal for your end users is critical for growth and capturing revenue.