Server performance refers to how well a server operates in handling requests and processing data. It is measured by factors such as response time, throughput, and resource utilization. High server performance ensures that applications run smoothly and users experience minimal delays. Key components affecting server performance include CPU speed, RAM capacity, and disk read/write speeds. Optimizing these elements can lead to faster data processing and improved user satisfaction. Regular monitoring and maintenance are essential to identify bottlenecks and enhance overall efficiency.