What sort of latency threshold does Confluence have with respect to it's connection with it's database?
No posted threshold, but i'd recommend as low as possible. We do use the db quite a bit; any latency means you'll be tacking on that latency in multiples on many requests.
We do cache heavily, but that's no substitute for network fidelity. I would personally would shoot for under 20 as a max... under 10 would be better.
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