CIO — Companies developing latency-sensitive applications for hosting in their data centers could take a lesson from the playbook of OnLive.

The startup company, which just had its coming-out party during the recent E3 gaming confab, runs resource-intensive computer games on its servers and streams the action to players throughout the United States. Despite the technical hurdles of delivering real-time games—many of them first-person "twitch" games—to consumers, the service has quickly become popular, says Steve Perlman, the company's CEO.

So much so, that the company has had to expand faster than planned.

"We are in the fall projections for our business model in terms of subscribers," he says. "We ran out of floor space in our current colos."

The service is a different take on game delivery. Some game companies are, somewhat controversially, requiring consumers to be always connected to the Internet, to head off piracy. Other game services, such as Steam and Battle.net, deliver entertainment software online. However, OnLive uses the Internet to deliver the actual content and upload players' commands and mouse movements, clicks and twitches, to servers running in the company's data centers.

The service trades computer games' increasing requirements in terms of PC hardware for a requirement of a stable high-bandwidth Internet connection. While modest PCs may be able to play high-performance games, the player's household needs a hefty connection to the Internet. For high-definition games, the player needs a 5 Mbps connection. However, the service degrades gracefully, with laptop screens requiring less bandwidth. Even standard definition, at 500 Kbps, is supported.

OnLive calculates that up to 60 percent of households in the United States could receive the bandwidth necessary for high-definition screens, says Perlman, who has been focused on content delivery since he founded WebTV in the 90s.

The Latency Issue

Yet, to make it all work, OnLive had to spend much of its time creating a low-latency data center and infrastructure. To play interactive games over the Internet, the biggest hurdle is not bandwidth, but latency. Ideally, games should have no more than 80 milliseconds of delay, says Perlman, but delays of up to 150 milliseconds can be tolerated.

"There is a lot of confusion about latency and bandwidth," Perlman says. "Bandwidth and latency are orthogonal to each other. When you look at CDNs (content delivery networks) they are not there to optimize latency, they are there to optimize bandwidth."

To tackle the problem, the company used the concept of data-center clusters. The company dynamically tests the latency between each of its data centers and the player's computer and chooses the best tier-1 Internet service provider to deliver the content and retrieve gamers' actions.

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