Packet latency is a big issue in Internet-based applications (i.e. the stuff in the cloud). In conducting analysis on Internet infrastructure over the years, we have seen many patterns of connectivity. One such pattern that can wreak havoc on latency is "hair-pinning", a phenomenon where traffic takes an unnecessarily long physical path between two points on the Internet due to suboptimal routing.
The increased distance results in increased latency, and the "lag" or "sluggishness" that users experience as a result can hinder latency-sensitive online applications whether they are financial trading applications or MS SharePoint.
A couple of weeks ago (September 23rd to be exact), I noticed a small routing outage (150 globally routed prefixes) in Sakhalinskaya Oblast, the most Eastern part of Russia. We observe these types of outages every day — the Internet is a big messy place behind the scenes. The obscurity of this location piqued my curiosity and I looked into how this area gets Internet connectivity — almost exclusively through Russian provider, TransTelecom
Continued at http://www.renesys.com/blog/2011/10/pinning-down-latency-in-the-mi.shtml
Doug Madory is a research engineer at Renesys