[LightDestory]

The right geographical location for your server can be important for many reasons but it is usually for you to choose the right ones depending on the purpose of the server, your target audience and other factors.

- High performance Internet applications (services running over the Internet instead of being hosted in a LAN) not only require a lot of (fast) processing power and other resources but also a latency as low as possible. Remember that for every request that is sent the network latency is added as one factor that adds up to how fast you will get your data processed. Running such applications on a powerful server but with high latency will yield rather bad results due to long loading times caused alone by network latency (despite of having so much - fast - processing power).

At the company I work for we have created a big LAN network over Internet by using fibre between all of our locations and a data center in Bavaria. The latency between all our locations is fairly low <10ms while the latency to the data center, because it is way more far away, is around 15ms. Considering that we use this as a LAN network to unify all locations the low latency is very important. Sure the latency are not as low as inside a real LAN but it is much lower than running Site to Site VPNs over a normal Internet connection where the latency between the different locations already would be 30 - 50ms (closest location to most far away location).

The same actually even applies to as simple things as web hosting. Every request is accompanied by network latency. Hence why a Japanese/Chinese/Korean site that is truely hosted in these counries will take forever to load for people from Europe or other countries compared to Asian countries around the mentioned countries. Imagine loading a site with 100 requests for various resources (css, js, html, pictures, fonts...) and to every of that request add 300ms... that's already 30 seconds of network latency without having even considered the fact that a picture might have a big size and the transfer speed is low because of unoptimized routes and bad bandwidth carriers. Also did we even consider DNS resolution latency, yet? Nope, we didn't!

- Game servers are one subject you mentioned. Not all kind of game servers need low latency. FPS game do need a low latency while something like Minecraft might not need a low latency to work properly. A low latency matters in FPS because of the reaction time. You have a higher latency = you are slower than others = you lose. So here it is up to you what you require in the end and what kind of game server you want to run.

- "Freedom" is another point why people choose certain locations. One part of that surely is the data protection but the other parts are things such as "free speech", "ignoring DMCA requests", "ignoring requests from foreign (especially US) authorities" and etc. There are many things that people want to do that are not allowed in almost everywhere on the world except in some certain exotic countries. It's sometimes the Internet freedom that the people seek that decides where they host their servers. Laws play a key role here.

- Staying anonymous while retaining as much of your Internet speed and performance as possible is one reason why I for example choose a server nearby if I want to setup a VPN. However again this is related to a) performance and b) freedom of the Internet.

- Quality of service and Internet is maybe one of the most important things. While nowadays we can get hosting almost everywhere the quality of the available traffic and bandwidth is not always top notch. The prices are sometimes very expensive. Even big ISPs might not be ready to fork out more money to buy more or better bandwidth for their customers. All of this is leading due to poor quality of service.

My ISP which is Deutsche Telekom AG (DTAG) is one of those that despite earning a lot of money due to owning all of the DSL lines in Germany and a lot of fibre... thus being able to sell service at actually pretty high prices... well, they didn't bother to extend bandwidth carrier contracts and buy more bandwidth volume some years ago. And that with some of the most important bandwidth carries for transit between Europe and the US. What does this mean? This means that everything hosted in the US was loading very slow, customers had many issues with using services such as Youtube, Netflix and etc. Even inside Germany it was a disaster when DTAG didn't want to upgrade capacity with GTT... at the peak of the day I was getting speed rates of 30 - 100 KB/s inside Germany to big data centers such as Strato, Hetzner and etc. All of that because the DTAG transit via GTT was overloaded. I was hosting some sites at that time and the backup volume was getting bigger and bigger but the speed to slower and slower. Took me hours to backup a few sites at that rate.

TL;DR: latency is not the only important thing when choosing locations. Bandwidth carriers and their quality also matter. Certain ISPs use cheap traffic with unoptimized routes. Others use premium routes while charging a bit more. That's one of the reasons why sometimes a more close location might yield worse results than something more far away. I have experienced this with a Japanese ISP when using SoftEther VPN. I had only like 5% overall performance loss of my actual connection. Despite Germany - Japan being a huge distance everything loaded very snappy, Youtube videos at high resolutions were no issues and downloads were finished quickly.


There are of course way more reasons but I'm not going to list them all here now or this thread is going to be endless.

Your reply is mind-blowing. A lot of good information. You have explored almost every use/need of VPS. 
Thanks you for your time.

@Honey I think that 350ms is unplayable