Understanding Remote Peering Tuesday, July 23 1:00 PM (ET)

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Norton Chief Strategy Officer, International Internet Exchange (IIX),

1 USTelecom Webinar: Understanding Remote Peering Tuesday, July 23 1:00 PM (ET) Presented by William B. Norton Chief Strategy Officer, International Internet Exchange (IIX), Executive Director, DrPeering International, Author of The Internet Peering Playbook: Connecting to the Core of the Internet

2 Questions for the Instructor or for a Logistics Issue Use the chat feature on the online player or questions@ustelecom.org

3 Understanding Remote Peering William B. Norton Chief Strategy Officer, IIX Executive Director, DrPeering International US Telecom Webinar Live from Silicon Valley July 23, AM PST

4 Meet the Presenter Started working on Internet (NSFNET) in st Chairman of North American Network Operator Group (NANOG) ( ) Co-Founder & Chief Technical Liaison, Equinix Inc. (NSDQ: EQIX) 2008-Present - Executive Director, DrPeering Int l Two-day On-Site Peering Workshops (EU/Africa) The Internet Peering Playbook 2013 Chief Strategy Officer, International Internet Exchange (IIX) Remote Peering is an important topic

5 Remote Peering Hot Topic 130 of the 630 at AMS-IX are remote peering 50% of new at DE-CIX are remote peering This is not a fringe peering technique anymore Source: Job Witteman (AMS-IX), Andreas Sturm (DE-CIX) Pre-webinar seminar

6 Pre-Webinar Survey Interest in Remote Peering? Understand emerging Internet Operations trend Understand Peering Building a NG Network see how R.P. applies Make sure to cover Remote Peering impact on costs & architecture Applicability to Data Centers, IXPs, ISPs, CPs, etc. Remote Peering Pain Point Deployment challenges Agenda

7 Agenda 3 Internet Interconnection Techniques 1. Connecting to the Edge: Internet Transit 2. Connecting to the Core: Internet Peering 3. Connecting to the Core from afar: Remote Peering Remote Peering Use Cases Implications of Remote Peering Internet Transit

8 Connecting to the Edge of the Internet 1) INTERNET TRANSIT

9 Internet Transit Service Model 99.9% of all Announce Reachability Metered Service Simple Internet This Way 9

10 95 th Percentile Billing Calculation 5 minute samples Month of deltas 95 th percentile Max(in,out) 10

11 Transit Pricing with Commits Volume discounts Contracts with terms and duration Commit Unit Price MinSpend 10 Mbps $12 per Mbps $120 /month 100 Mbps $5 per Mbps $500 /month 1 Gbps $3.50 per Mbps $3,500 /month 10 Gbps $1.20 per Mbps $12,000 /month 100 Gbps $0.70 per Mbps $70,000 /month 11

12 Internet Price Declines (U.S.) Can t go lower No one is making $ Pricing varies widely Trend unmistakable 12

13 Connecting to the Core of the Internet 2) INTERNET PEERING

14 What is Internet Peering? Definition: Internet Peering is the business relationship whereby two companies reciprocally provide access to each others customers. 14

15 3 Key Points Internet Peering 1. Peering is not a transitive relationship 2. Peering is not a perfect substitute 3. Peering is typically settlement free 15

16 The Top 5 Motivations to Peer 1. Lower Transit Costs (#1 ISP Motivation to Peer) 2. Improve end user experience (#1 Content Motivation) 3. Better control over routing-strategic (Yahoo!, NetFlix 2008) 4. Usage based billing make more money by peering (AboveNet) 5. Sell more underlying transport capacity (Telecom Italia) 16 Important Traffic is Peered

17 Important Traffic is Peered Transit your traffic is in same bucket Peering you control this traffic Does Peering cost less?

Assumptions Far Transport into IX: $6,000 per month Colocation Fees: $1,000 per month Peering Fees: $2,000 per month Equipment Costs: $2,000 per month Total Cost of Peering:

18 Assumptions Far Transport into IX: $6,000 per month Colocation Fees: $1,000 per month Peering Fees: $2,000 per month Equipment Costs: $2,000 per month Total Cost of Peering: $11,000 per month The Cost of Peering Transport into DE-CIX $2000/mo local $4000/mo nearby $6000/mo far Source: 2010 DE-CIX meeting, Frankfurt 18 Costs allocated across volume peered

19 Cost of Internet Peering Assumptions Far Transport into IX: $6,000 per month Colocation Fees: $1,000 per month Peering Fees: $2,000 per month Equipment Costs: $2,000 per month Total Cost of Peering: $11,000 per month Cost of Peering allocated across the amount of traffic peered for free. Mbps Exchanged Peering Cost 100 Mbps $ per Mbps 200 Mbps $55.00 per Mbps 300 Mbps $36.67 per Mbps 400 Mbps $27.50 per Mbps 500 Mbps $22.00 per Mbps 600 Mbps $18.33 per Mbps 700 Mbps $15.71 per Mbps 800 Mbps $13.75 per Mbps 900 Mbps $12.22 per Mbps 1000 Mbps $11.00 per Mbps 1100 Mbps $10.00 per Mbps 1200 Mbps $9.17 per Mbps 1300 Mbps $8.46 per Mbps 1400 Mbps $7.86 per Mbps 1500 Mbps $7.33 per Mbps 1600 Mbps $6.88 per Mbps 1700 Mbps $6.47 per Mbps 1800 Mbps $ per Mbps Generalized in Peering Vs. Transit Graph.

20 Definition: The Peering Break Even Point is the point where the unit cost of peering exactly equals the unit price of Internet Transit. We will use this graph to compare Transit, Peering and Remote Peering 20 Market Dynamics affecting these graphs

21 Market Trends Peering Cost Drops but Transit Price Drops Faster 21 These dynamics present brick wall

22 Some question if peering makes sense today RP

23 Connecting to the Core of the Internet from afar 3) REMOTE PEERING

24 Definitions What is Remote Peering? Definition: Remote Peering is peering without a physical presence required at the peering point. Definition: A Remote Peering Provider is an entity that sells access to exchange points across their transport infrastructure. 24 Review the costs of the Traditional Peering Model

25 Traditional Peering Point to Multipoint Peering Example Router CapEx Colocation Expense and Remote Peering

26 Remote Peering Point to Multipoint Remote Peering Example No router No colo Peering Fabrics Extended as VLAN To customer Remote Peering Service Model

27 Remote Peering Service Model London Internet Exchange Amsterdam Internet Exchange German Internet Exchange Why it works

28 Remote Peering How does it work? Remote Peering Provider is already installed at the IXPs. Waves provisioned, instant turn up. Neutral RPP no business clash No router No colo Peering Fabrics Extended as VLAN To customer Remote Peering Provider Node Peering Focus Speeds IXP deploy Little paperwork One Contract Case Studies and Use Cases

29 Four site European Deployment CASE STUDY

30 Traditional Peering LinkedIn Case Study (NANOG 48 Peering BOF) Router CapEx $275K/mo London Colocation Expense $3.5K/mo Dublin $6K/mo Frankfurt Source: LinkedIn Amsterdam Spain (not shown)

31 Remote Peering LinkedIn Case Study (NANOG 48 Peering BOF) No router No colo Dublin London Peering Fabrics Extended as VLAN To customer $6K/mo Frankfurt Amsterdam Spain (not shown) Summary

32 Traditional Peering vs. Remote Peering For the price of transport alone, one can remotely peer. Source: Zaid Ali Kahn, LinkedIn Use Cases

33 What Remote Peering Means to the Internet Peering Ecosystem USE CASES

34 For NG Networking Blend Transit, Strategic Internet Traffic is remotely peered No capital costs Control over routing

35 For Int l Networks Remote peer into cheap ecosystem Buy Transit Peer Away 98% Africa traffic from US/Europe

36 For Cable Companies / ISPs Case: Canadian MSO peers in U.S. But Remote Peering in LA and Miami for free Asia and South American Internet routes

37 For Content Companies Important Traffic is peered Gold plated packets Peering simplified Peering Delivered Lower people cost Strategic intent Performance A/B testing Commodity Transit is cheap, but some applications require more control / better performance

38 For Internet Service Providers, Remote Peering justifies building into more and even smallish regional IXPs. Fast turn-up/transition strategy More controls over routing No Capital costs

39 What Remote Peering Means to the Internet Peering Ecosystem IMPLICATIONS FOR THE INTERNET PEERING ECOSYSTEM

40 1) For all Network Operators Remote Peering extends the life of peering Breathe of fresh air into Peering Effective Peering Range Peering makes sense across a wider range of Mbps. Peer away 2-3Gbps and all costs are covered. More peers more IXP value

41 2) For IXPs, Remote Peering increases the value of IXPs More new peers, more traffic, more routes More Valuable IXPs Colo->instant critical mass

42 3) For Colocation Centers the Remote Peering Provider enables instant critical mass Colocation Companies ALL PEERING ROUTES ARE REACHABLE! Remotely Reachable peers makes colocation center immediately valuable (Value > Cost) Trials and transition

43 4) For all, rapid turn-up means Remote Peering enables a fast deployment/transition strategy: 1. Remote Peering 2. Full Network Deployment Summary

44 Remote Peering Summary New but rapid adoption Connect to the Core from afar $0 Capital Cost Minimal deployment time IXP VLANs extended to the customer router

Book Offer Send email to book@iixpeering.

45 Book Offer Send to Subject: webinar book Amazon.com: $83.31 IIX Sponsorship: $9.99

46 Upcoming Events Impact of SDN on the Evolution of Service Provider Networks Thursday, August 1 1:00 PM (ET) USTelecom CSM Training Seminar USTelecom SIP Training & Certification USTelecom WebRTC Courses Learn more at

Regional Interconnection Strategy for Africa. Regional Peering and Interconnection Economics

Regional Interconnection Strategy for Africa Regional Peering and Interconnection Economics Connecting to the Edge of the Internet INTERNET TRANSIT 2 Overview of Internet Transit Start assuming no knowledge