When readahead works well, it can significantly improve the performance of I/O bound applications by avoiding the need for those applications to wait for data ...
This is poorly worded. It should say the speedup is from allowing the application to overlap computing and I/O. It doesn't eliminate the wait so much as allow the application, without any fancy threading, to do something while it waits.
and by increasing I/O transfer size
And another equally important effect: it allows the system to order the reads more efficiently (which is very important in a filesystem that has seek time).
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