Equinix peering location matters 2016_feb_24

Confidential – © 2016 Equinix Inc. Equinix.com 1

Peering at EquinixWhy location choice matters

AMS-IX • Ashburn • Atlanta • Chicago • CIXP • Dallas • DE-CIX • ECIX • France-IX • INEX • IXManchester • Geneva • Hong Kong • JPIX Tokyo • JPIX Osaka • JPNAP Tokyo • JPNAP

Osaka • KleyReX • LINX • LONAP • Los Angeles • Melbourne • Miami • MIX-IT • NETNOD • New York • NL-IX • NSW-IX • Osaka • Palo Alto • Paris • PTT.br Sao Paulo • PTT.br Rio de

Janeiro • Seattle • Silicon Valley • SIX • SOLIX • STHIX • SWISS-IX • TORIX • Toronto • Vienna (U.S.) • Singapore • Tokyo • Sydney • UAE-IX • VIC-IX • Warsaw • Zurich


CONTENTS

1. About Equinix

2. The Five Essentials of Peering Planning

i. Plan for 20+% future traffic growth annually

ii. Include peering as part of IP traffic growth strategy

iii. Plan for a blend of transit, public and private peering according to traffic volumes

iv. Understand the cost and flexibility implications of campus peering vs. distributed peering

v. Plan for private peering traffic to outgrow public peering traffic.

3. In the Beginning There Was IP Transit

4. Summing It All Up

2


DCNY

CH

DA

SV, PA-IX

LINX, LONAP, NL-IX

AMS-IX, NL-IX

DE-CIX, KLEYREX, ECIX, NL-IX

SG

SY, NSW-IXPTT.BR SP

MI

TY, JPIX, JP-NAP

TO, TORIXSE. SIX

HKUAE-IX

PA, NL-IX, France-IX

ZH, G

V, C

IXP,

SWIS

S-IX

ME, VIC-IX

PTT.BR RJ

OS, JPIX, JP-NAPATLA

GRXGRX

Equinix operates or hosts the world’s largest Internet Exchanges

22EXCHANGES

27PARTNERS

WA, PLIX

GRXNETNOD Se, STHIX, SOLIXINEXIXManchester

MIX


Five essentials of peering planning

1. Plan for 20+% future traffic growth annually

2. Include peering as part of IP traffic growth strategy

3. Plan for a blend of transit, public and private peering according to traffic volumes

4. Understand the cost and flexibility implications of campus peering vs. distributed peering

5. Plan for private peering traffic to outgrow public peering traffic


Peering Essential #1


Plan for 20+% future traffic growth annuallyFailure to plan for future growth can result in lower network performance, higher costs, and negative customer impact

2013 2014 2015 2016 2017 2018

51,16862,476

75,739

91,260

109,705

131,553

Global IP Traffic Forecast*(PB per month)

* Source: Cisco Visual Networking Index: 2014

• Global IP traffic growth is forecast to grow at 21% CAGR through 2018*

• Growth in peak traffic is increasing faster than average traffic – peak traffic will grow 3.4x vs. average traffic at 2.8x between 2013 and 2018*

• Typical consumer broadband speeds will grow almost 3x between 2013 and 2018 – from 16Mbps to 42Mbps*



Proportion of Internet traffic by region

Global IP growth is uneven. Higher Growth = More Opportunity

Source: CAGR in average Internet traffic 2011 - 2015. Telegeography Global Internet Geography Capacity and Traffic Trends, August 2015.

NA 28%

LATAM 40%

MENA

EU

CEE

42%

32%

39%

APAC 38%




Include peering as part of IP traffic growth strategyPeering is consistently replacing transit

Source: Telegeography


Peering is consistently replacing transit on a global basis

Peering continues to be an attractive way to lower bandwidth costs. Transit price declines globally are

slowing .

Market share for transit is declining, being replaced by

peering

*Improving latency also motivates peering but typically cost is the primary driver




Internet Exchange

IP Transit

Private Peering

Plan for a blend of transit, public and private peering according to traffic volumes


Operating all three IP Transport options minimizes cost at each phase

Cost($ MRC)

Total Traffic to given destination (Mbps)

Transit

Private Peering

Public Peering

Private Peeringis lowest cost

Public Peeringis lowest cost

Transitis lowest cost

• Transit is most cost effective at lower traffic volumes since multi-destination traffic shares the same bandwidth

• Public peering works well for mid-tier traffic due to cost savings vs. transit*

• Private peering over cross connects works well for high traffic volumes due to lowest cost advantage of direct cross connect*

NOTE: Actual break-even points can vary greatly around the globe depending on local, costs of transit, internet exchange ports, and cross connects

IP Traffic Maturity Model Conceptual Bandwidth Cost Model

Peering Essential #3a

1 2 3

1

2

3

*Improving latency is also a motivation for peering but typically cost is the primary driver

Phase

Phase

Phase


Use the full range of IP Transport options availablePeering Essential #3b

Failing to plan for a blend of all three IP Transport options increases costs and decreases choice

Value

Phase of Maturity

Optimal IP Transport Model

Level 1

Level 2

Level 3

IP Transit IP Transit IP Transit

Public Peering

Add: Public PeeringUse Internet Exchange to connect to peers

• When used: Typically adopted as bandwidth to particular destinations is consistent and continues to grow, this serves as the entry point to peering

• What to look for: A large number of peers on a common platform (Campus or Distributed Metro Peering).

• Benefits: A single peering port can reach multiple destinations, making peering more affordable on a cost per Mbps basis vs. transit

Add: Private PeeringUse Cross Connect to connect to a peer within campus• When used: When traffic to single destination becomes large• What to look for: Customers should be where there is a large number of

peers in a single campus or building (Campus Peering)• Benefits: Can scale to very high bandwidths at extremely low cost per

Mbps vs. public peering

Start: IP Transit / Direct Internet AccessUse Cross Connect to connect to carrier within campus• When used: Lower traffic levels to many Internet destinations.• What to look for: To achieve greatest bargaining leverage (lowest prices),

customers need to co-locate with the largest number of ISP networks.• Benefits: Low cost way to reach all internet destinations on a cost per

Mbps basis.

1

2

3

Public Peering

PrivatePeering

1 2 3

Phase

Phase

Phase




Understand the cost and flexibility of campus vs. distributed peering

Distributed Peering

Transit or Transport



Campus Peering

• Peers are colocated among multiple data centers distributed within a metro area

• Metro transport cost is factored into customer IX port price

• Peers are colocated within the same data center campus or building

• Customer IX port price does not need to factor in cost of transport

• Strength More choices of data center provider

• Weaknesso Higher cost structure = higher price ($6,500 for 100G)o Requires a switch per data center (cost + complexity + failure)o Transport between data centers (cost)o No ability to move to private peeringo Fewer choices of transit providers

• Strength Lower cost model = lower price ($4,000 for 100G) Requires less networking equipment No transport connections needed Easily offload larger flows to private peering (PNI) Offers maximum choice of transit providers

• Weaknesso Less choice of data center provider


Data Center A Data Center B

Data Center C




Plan for private peering traffic to outgrow public peering traffic

Private Peering90%

Public Peering10%

Public vs. Private IP Bandwidth@ Equinix*

Private Peering Delivers Highly Scalable Bandwidth• For many networks private peering can be 9X larger

traffic volume than public peering*• Private peering allows customers to change

networking technologies independent of the Internet Exchange provider

• Expect private peering traffic to grow at roughly a 20% CAGR

Selection factors in a peering location• Campus peering model (vs. distributed)• Number of peers in the campus

Implications• Choosing the wrong peering location can result in

costs of $1,500 per connection vs. $350• Customers are limited to the functionality supported

by the IX platform

* Source: Equinix study


Worldwide, 9x more IP traffic is peered privately than currently passes over all public IXs*


So why Equinix for peering? Equinix hosts the largest private peering ecosystems worldwide


IP Transit

IN THE BEGINNINGTHERE WAS


1000+Equinix has a massive ecosystem of IP Transit Providers

average number of networks in Equinix’s top 10 data center campuses

100+150

networks globally

data centers globally

Equinix offers access to hundreds of Transit providers offering low-end competitive pricing


Equinix’s network-dense campuses minimizes transit costs

Note: Assumes 400Mbps Commit in New York. Source: Telegeography

Transit price in general market

Transit price at Equinix

$-

$0.50

$1.00

$1.50

$2.00

$2.50

$3.00

$3.50

$4.00

$4.50

$3.82

$0.94

Transit pricing at Equinix is much lower than the general market

$ pe

r Mbp

s

• The density of network service providers that Equinix has built increases competition among those providers.

• The presence of key Internet Exchanges exerts a downward pressure on Transit Prices

• As a result of the competitive pressures, transit pricing for Equinix customers can be as much as 75% less than in the general market.

Transit at Equinix can be 75% lower than the general market


Regional Median vs lowest local Transit prices in Mbps, Q1/Q2 2015*. Network density & IX Presence drives Competitive Transit pricing

*Source: Telegeography IPT Stats Series and IP Transit Pricing Database, based on 10GbE / 10Gbps Committed Data Rate.

NY$0.66

FR$0.3

LD$0.3

SP$9.0

DX $10

SG $2.0

SY $7.0

$1.47Median

$1.39Median

$1.42Median

$22.30Median

$6.45Median

HK $2.95

$6.2Median

$27Median

$56.50Median


Summing it all up...


Transit: By bringing together over 1,150 network carriers globally, Equinix creates the most dense network ecosystems. The resulting competitive pressures among them significantly drives down costs for transit buyers.

Public Peering: Equinix operates or partners the leading Internet Exchanges worldwide, giving you access to the largest peering communities in all key locations.

Private Peering: Equinix hosts the largest number of ASNs in independant carrier-neutral co-location space. This minimizes the cost of private peering by providing a low-cost platform that scales beyond IX speeds.

Campus peering: Equinix has the largest set of global peering campuses in the world which keeps peering costs low by making

peers typically just a cross connect away.

The best IP Transport solutions are a blend, requiring access to a full and competitive

choice of services:


Public Peering—Internet ExchangeAccess to EIX Internet Exchange or partner IX. Public Peering offers low price aggregated peering and QoS.

Private Peering—Cross ConnectAccess to 1,150+ Networks + ASNs via cross connect. For larger throughput BGP sessions, Private Peering offers lowest costs, highest QoS and Security.

IP Transit—Cross ConnectIP Transit may be the only option or might be a cost-reduction strategy in EU and USA. QoS is “best effort”. Equinix hosts all key global competitive IP Transit providers, offering maximum choice of IP transport options.

Public Internet

Public Internet

Mobile Network Operator

IBX Campus Metro

Cloud Services

Cloud Provider

IT ServicesCDM Network & Services

Mobile Services

Network Operator

A full and competitive choice of services


Whatever the best and most competitive IP Transport strategy for your organization…

Public or Private Peering or Transit

…Equinix offers it worldwide


Case Studies and Selected Peering Member List


Netflix leverages Equinix 100G IX to deliver reliable video globally

“As video usage continues to grow exponentially on the Internet, its robustness relies on continual improvement of public Internet Exchange Platforms such as the Equinix Internet Exchange. The massive scalability that a 100G-capable platform provides leads to greater efficiency and helps us continue to deliver a great Netflix experience to our members around the world.”

David TemkinDirector of Global Networks


Hurricane Electric leverages public and private peering across Equinix’s global footprint

“As the world’s largest IPv6 network, Hurricane Electric is focused on providing our customers with the highest quality transit service at the lowest price across North America, Asia, and Europe. To keep our costs low and reduce network latency, Hurricane makes extensive use of Equinix’s globally deployed campus peering environments which allows us to interconnect with companies we need to, either through their Internet Exchange platform or through private interconnection.”

Mike Leber

President


Selected Peers @ Equinix*

• Adobe Systems• Akamai Technologies• Amazon.com• Apple Inc• Bell Canada • Blue Coat Systems, Inc• BrightRoll, Inc.• Broadview Networks• BT• CDNetworks Inc.• Charter Communications• Cisco Systems, Inc.• CloudFlare• DataPipe• Deutsche Telekom• Dropbox• eBay Inc.• EdgeCast Networks, Inc.• Etisalat• Facebook• Foursquare

• Frontier Communications• Frontier Networks• GlobeNet• Google Inc.• GTT Communications• Hibernia Networks• Hurricane Electric• Integra Telecom• Intercloud• Internap (formerly Voxel)• Interoute• IX Reach - IIX• KPN• Limelight Networks• Linkedin• Microsoft• Netflix• Neustar• NTT Communications• Orange Business Services• OVH

• Pacnet• Pandora Media, Inc• PCCW Global• Peak Web Hosting• PEER 1 Hosting• PenTeleData• Priceline.com• Quantcast• Rackspace• Rocket Fuel Inc.• Rogers Cable• Salesforce.com• Shaw Cablesystems• Sirius Telecom• SoftLayer Technologies, Inc. • Suddenlink Communications• Swisscom• Telecom Italia Sparkle• Telekom Malaysia Berhad• Transtelco• TransTelecom

• TripAdvisor LLC• tw telecom• Twitter, Inc.• US Signal• Ustream, Inc.• Valve Corporation• Verisign• Verizon Cloud• Vodafone GlobalNet• Walmart.com• WebEx Communications• Wikimedia Foundation• Windstream Communications• XMission• XO Communications• Yahoo!• Zayo• Zynga Game Network, Inc.

Source: Peering DB – June 2015


Technology

Equinix peering location matters 2016_feb_24