Q: DrPeering -

The dominant exchange points have a large population of peers. And if we be just a startup IX, the competitive situation would look mighty bleak. Is there anything that will displace the big guys?

Mal Reynolds

A: 

Many of these IXPs have grown well past critical mass and therefore provide great value to their customers and offer great value to the marketplace. Startup IXPs will have a tough time convincing prospects that they, too, have value. However, some startup IXPs recognize that their strength is their agility. They will realize that they can frame a superior value proposition to customers, they can satisfy some niche, they will be more entrenched in the community, and they will be able to execute when the large organizations have meetings to discuss a response to the changing market. The large IXPs service so many countries and have so many staff that they will be slower to adjust, and the smaller startups will capture the opportunity to build the next-generation IXP.

The next-generation Internet Exchange Points will emerge in the next 5 to 10 years. These new facilities have three drivers. First, the current generation of interconnect facilities were built over a decade ago, with a power density (1.75KVA per rack) appropriate for the era. These facilities are simply unable to provide the power for the next generation of equipment that will handle the emerging video traffic. Internet traffic has traditionally grown at 35% per year or so, and the video traffic is expected to be 80% of all Internet traffic by 2013. This growth will require the ability to interconnect and the ability to stream video at terabit-per-second speeds. The equipment to provide these speeds will likely require closer to 20KVA per rack, and the older facilities are unlikely to be able to provide that environment for the massive volumes of video distributors and access networks at the core.

The next generation of facilities will likely follow the same trajectories as in the past.

The Tier 1 ISPs will not be able to keep up in the current environments; they will get together and put out a request for proposal to all of the major IXPs and colocation companies, and then they will select a center in each of the interconnection regions across the country. These facilities will be 20KVA facilities, near the existing colocation centers, and the Tier 1 ISPs will extend their network there. The CDNs and access networks will follow them there, and shortly thereafter the place for Tier 2 interconnection and content hosting will be at these new facilities.

I would put the chances of a next generation Internet exchange emerging at 80% likely within the next 3-5 years. It will of course take some time to emerge, but all signs indicate that the pain points will be there to drive it forward.The gravitational pull into these new facilities will be strong.

DrPeering@DrPeering.net

[ Editor’s note: This article was extracted from The Internet Peering Playbook: Connecting to the Core of the Internet. Reprinted with permission. ]