Dear Dr. Peering -

I understand that peering is something that ISPs do.  But does it make sense for Content Providers also?

Sven Zyborg-Price

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Sven -

The short answer is that the same economics apply to Content Providers as ISPs : if you can send enough traffic to peers (for free) to offset the costs of peering, then peering makes sense financially.

The same business logic applies as well - is it strategic for you to peer?  For ISPs, a core competence is managing traffic.  They already have, or are expected to have, a 24/7 Network Operations Center (NOC) and the expertise to chase down routing problems.  Most public peering policies have a requirement for a 24/7 NOC and escalation procedures. Is there sufficient benefit to you by controlling your end-user’s experience?

In the Global Peering Ecosystem, the largest Content Providers in the world have deployed large scale backbones for peering away 60%-90% of their content !  Companies like Yahoo!, Google, Electronic Arts, Sony Online, Microsoft, etc. purchase transit at scales large enough to get the lowest possible transit prices yet still maintain that peering is the less expensive and better performing alternative. Most of them claim “It is all about the end-user experience.”

At the same time, peering is not for everyone.

There are at least 3 strong arguments for Content Companies NOT to peer. 

1. 1)Transit is Cheap. The cost of Internet Transit has never been lower; the cost savings by peering is minimal to non-existent in many parts of the world.  If the last ten years are any determinant, the price of transit will continue to drop. Any cost savings today may disappear tomorrow. Apply the Business Case for Peering.
   

2. 2)Peering is Not your Core Competence. The expertise for most Content Providers is in creating the content, supporting the user base, building the user base, optimizing the content for search engines, etc.  This is a very different core competence than network engineering in the public Internet.
   

3. 3)Peering is Not Strategic. For most Content Providers, having a reliable connection to the Internet through one or two upstream transit providers and/or CDNs serves their purpose well. Unless you are managing very viral content, content with unique characteristics, need to adjust things dynamically, are blazing a new trail, outsourcing is probably good enough.
   

In summary, similar logic applies to both ISPs and Content Providers.  The rational peering decision always seems to boil down to financial logic and strategic intent.

Dr Peering

DrPeering@DrPeering.net