Elon Musk’s need for speed
As the media coverage of the project ramps up, you may have heard of Starlink – SpaceX’s new satellite constellation project. The ultimate goal of this venture is to deploy nearly 12,000 satellites into very low orbit, creating a “blanket” of coverage spanning the globe. A lot of coverage on this project is centered (rightfully) around the potential of this project to deliver fast internet to underdeveloped nations at a minimal cost. However, there is excitement around Starlink for other reasons – namely, the implications it might have for internet speed and latency – even by just a small amount (20 milliseconds on average).
This ultimately guides us to one conclusion: Speed is incredibly important. And thus, a fast website is more critical than ever.
UPDATE – As of October 15 SpaceX has submitted plans for an addition 30,000 Starlink satellites, further showing this commitment towards speed.
Starlink’s Goal: Reduce Internet Latency
Real Engineering has created a fascinating video that explains the impact the project may have on internet speed as well as financial and economic implications. The video uses the time it currently takes for information to travel from the New York Stock Exchange to a viewer in London to illustrate the advantages that this network could offer. Currently, the average time to request and receive this information for “the average Joe” is around 76 milliseconds. This is achieved via either the Atlantic Crossing 1 (AC1) or Atlantic Crossing 2 (AC2) transatlantic cables.
Elon Musk has detailed an initial target of 20 ms, scaling down to sub 10ms of latency, but this is Starlink-only transit times. Still, Real Engineering has estimated that sending information from New York to London, including time to move information along the various satellites, could be as low as 43 ms of latency. This means that our current average time of 76 ms is 77% slower than what could be achieved with Starlink. This is all achieved because light moves much faster in a vacuum (space) than through a cable under the ocean.
Why is this Investment Worth it to SpaceX?
As you might imagine, a project of this magnitude doesn’t come without a significant price tag. It is estimated that Starlink will cost close to 10 billion dollars to complete. This number would be higher if not for the fact that SpaceX can use it’s own rockets to launch the thousands of satellites needed into orbit. That is a massive investment, and SpaceX is a company – meaning they’re not doing this out of the goodness of their hearts. They expect to make a profit from this venture, and as it likely won’t be from underdeveloped nations, where is it supposed to come from?
Fortunately we have a reference point: In 2015, a private company unleashed the Hibernia Express Cable, running from New Jersey to England. At a cost of 300 million dollars, this cable reduced the latency of this transatlantic journey down to 59.95 ms. The amount of money that companies are investing in infrastructure to reduce latency by a few milliseconds is staggering. This gives us an idea of just how much companies would pay for a latency that gets reduced all the way down to 43ms from London to New York.
In fact, Elon Musk said during a call with reporters that Starlink could eventually net the company perhaps $30 billion to $50 billion per year. This would come from companies in the financial sector and others dealing in markets with rapidly changing prices. The benefits of a lower latency would be massive, and they will pay for that massive advantage.
What does Starlink and Reduced Latency have to do with me?
Sure, this is all interesting, but what does it mean for you and your website? At the very least, it is a very clear indication of how large companies and financial market players value speed. In fact, we’ve covered before just how much difference even a few milliseconds can make when it comes to your site’s bounce rate and ecommerce revenue. In our article How Does Page Load Time Affect Your Site Revenue, we illustrated the dramatic difference this can make:
Even by a few hundred milliseconds, can affect your business bottom line. Here are some real-life examples:
– Walmart and Amazon both observed a 1% increase in earnings for every 100 milliseconds of improved webpage speed.
– Yahoo saw a 9% increase in traffic to every 400 milliseconds of webpage speed improvement.
– Google loses 20% of their traffic for every additional 100 milliseconds it takes a page to load.
As you can see, stock markets and individual countries aren’t the only ones that would be happy to invest in Starlink if it improved the time it takes to serve their website to potential customers. Large companies could see increased traffic, increased revenue, and lower bounce rates as a result.
Speed is worth the investment
It can be difficult to understand why a company would invest 10 billion dollars into infrastructure for a roughly 20 millisecond faster latency speed. When we look at other examples however, we see a precedent. 300 million was invested into the Hibernia Express Cable, and it’s still 39% slower than what we expect to see from Starlink. Perhaps the crazier part to all of this, is that these investments are typically worth it. The financial markets, currency exchange brokers, and even major companies like Walmart and Amazon, could see huge improvements to their bottom lines with an improved latency time such as the one expected from SpaceX.
The example in the video used London to New York as an example, but the effect is even further increased when you imagine information traveling to China, Singapore, Australia, or any other distant market. Not lost in all of this is the opportunity to provide internet to the nearly half of the world’s population that doesn’t currently have that opportunity. Without the willingness of these companies to spend huge sums of money to improve the speed and availability of our internet, this wouldn’t be possible, and it should serve as a huge indication of how important web performance is in today’s world.
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