Peering into enterprises

15 November 2016

By: Mike Hollands

Traditionally, Internet Exchange Points (IXPs) have seen network owners as their core customers. Today, that’s starting to change: the plummeting cost of IP transit is causing IXPs to expand their member base in search of new opportunities – and enterprises are high on the list of potential candidates.

We’re now living in the zettabyte age; the data created in the last two years alone outweighs everything else produced in the history of mankind. IDC predicts that worldwide data will reach 44 zettabytes by 2020 – or, if you prefer, 44 trillion gigabytes (that’s a lot of iPads).

Enterprises are on the sharp-end of this information overload. Traffic demands are skyrocketing as cloud, mobile, social, video and big data become increasingly essential to business success.

In this digital world, performance and profitability often walk hand-in-hand. For large enterprises, the ability to gather and distribute huge volumes of IP traffic cheaply and effectively on a global scale is a decisive advantage. That makes the right connectivity crucial - whether it’s empowering seamless online services for customers, business-critical cloud access, or an efficient workforce that can access and share information more easily.

Joining forces with IXPs does present clear benefits to major enterprises. Energy management and automation specialist Schneider Electric found it needed data transfer speeds of 250 megabits per second to support its 40,000 global customers. With its Paris data centre struggling to keep pace, the firm recently signed up with France-IX to enable increased throughput at a lower cost. The question is, will others follow Schneider’s example?

Mind the knowledge gap

With IXPs offering a fast route to low-cost global connectivity, it would seem that enterprises are the ideal new members to target. However, expanding into the enterprise market also brings new challenges. Unlike network owners, enterprises usually don’t have any public peering expertise in-house. Conversely, IXPs are also used to engaging with tech-savvy members that already understand the benefits they can offer.

Unfortunately, joining an IXP is a complex process and firms also need a high-level of expertise to get the most from their newfound connectivity. If enterprises can’t match these technical demands – for instance, failing to ensure exchange point redundancy - they may find that other members refuse to interconnect with them, ultimately restricting the benefits they see from joining an IXP.

To woo enterprises effectively, IXPs need to simplify their value propositions. Technical language needs to morph into clear, bottom-line business messages. Talk of latency and throughput improvements will mean little or less to most enterprise buyers; they are more likely to be swayed by an IXP’s value-add services, such security enhancements or streamlined cloud connectivity.

Partner up?

To successfully attract enterprise members, IXPs may be better off taking an indirect route. Managed service providers, systems integrators and colocation facilities all have the technical expertise and marketing capabilities to speak to enterprises in language they understand and guide them towards reaping the most benefits from joining an Exchange.

For instance, most IXPs now have nodes in colocation facilities throughout their home city, such as the ten LINX access points in London. If an enterprise is already a colocation customer, it can achieve fast, low-cost access to global connectivity via a single, simple cross connect. Meanwhile, managed service providers can help IXPs complement their connectivity with new services that appeal to the enterprise market.

Ultimately, there’s enormous potential for IXPs in the enterprise space, but the future of peering remains very much in flux. Exchanges may be dab hands when it comes to global connectivity, but forging those vital links with enterprises may prove more elusive - at least for the moment.

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