A Business Case for Peering in 2010

1. A Business Case for Peering in 2010 wbn@DrPeering.net William B. Norton Executive Director, DrPeering.net 30-31 August 2010Frankfurt, Germany This work was sponsored in part by DE-CIX and DrPeering.net 15 YEAR ANNIVERSARY PARTY 1st DE-CIX CUSTOMER SUMMIT

2. Background 1987 – building Internet Ops community 1998 – building Peering Intelligence 2008 – consulting, education

3. DrPeering.net Peering Resources • Internet Service Providers and Peering • A Business Case for Peering • About the White Paper Process • The Art of Peering - The Peering Playbook • The Art of Peering - The IX Playbook • Chief Technical Liaison • Ecosystems: 95th Percentile Measurement for Internet Transit • Asia Pacific Peering Guidebook • Evolution of the U.S. Peering • Emerging Video Internet Ecosystems • European vs US Internet Exchange Points • Internet DataCenter Build vs Buy Decision • Internet Service Providers and Peering • Internet Transit Pricing Historical and Projections • Modeling the value of an Internet Exchange Point • NANOG History • Peering: Motivations to Peer • A Study of 28 Peering Policies • Peering Simulation Game • Peering: Top 10 Ways to Contact Peering Coordinators • Peering: Top 10 Reasons NOT to peer • Public vs Private Peering - the Great Debate • The Folly of Peering Ratios • Top 9 IX Selection Criteria • Video Internet - The Next Wave of Massive Disruption to the U.S. Peering Ecosystem All freely available

4. This is how I level set INTERNET TRANSIT

5. Definition of Transit Definition: Internet Transit is the business relationship whereby one ISP provides (usually sells) access to all destinations in its routing table Simple Well defined No netops req’d Traffic flows opposite direction of routing announcements 95th%

6. 95th Percentile P

7. Internet Transit Declines Noone makes $ Can’t go down trend

8. Market Prices for Transit Source: http://drpeering.net/white-papers/Internet-Transit-Pricing-Historical-And-Projected.php

9. Good news – Traffic always grows P60%V80%

10. Group: What happens at $0/Mbps? • BrainStorm – shout out • Tell me how a content distribution business can make money when • The transit price is $0/Mbps

11. AFTER INTERNET TRANSIT DOES PEERING MAKE SENSE ANYMORE?

12. Analysis of Traffic Flow Vs.direct

13. Analysis of Traffic Flow Def.P

14. Definition of Peering Definition: Internet Peering is the business relationship whereby companies reciprocally provide access to each others’ customers. Peering is not a perfect substitute for transit, & is not transitive. Back to traffic flow…

15. Analysis of Traffic Flow Top50

16. Peering Top 50 Histogram http://drpeering.net/forms/peering-top-fifty-list.xlsx Cost

17. Cost of Peering • Peering is NOT FREE • Transport Fees • Colocation Fees • Peering (Port,membership,etc) Fees • Routing equipment #s

18. Cost of Peering $8000/mo $6000/mo $2000/mo • Plug some #’s in • 10G Transport Fees: $6K/mo • Colocation Fees: $1K/mo • Peering (10GPort,membership,etc) Fees: $2K/mo • Routing equipment: $8K/mo • Total Cost of Peering: $17K/mo • Can peer ~ 7Gbps (for free) = $17K/7000=$2.43/Mbps best case scenario Colo $1000/mo Alternative to Peering: Transit at $5/Mbps How do we compare peering and transit? 1M,2M,3M

19. Peering Cost $17K/month Peering Metrics

20. Effective Peering Bandwidth /Minimum Cost of Traffic Exchange Minimum Cost of Traffic Exchange=$2.34/Mbps Effective Peering Bandwidth=7000Mbps

21. Peering Break Even Point Peering Break Even Point $2.34/Mbps Range…

22. Effective Peering Range Peering Break Even Point $2.34/Mbps Effective Peering Bandwidth Generalized

23. Peering Break Even Point Minimum Cost of Traffic Exchange Effective Peering Bandwidth Effective Peering Range Peering Metrics

24. The Business Case for Peering in 2010 Frankfurt Madrid Budapest

25. Value Of an Internet Exchange Assume that the next best alternative to peering at DECIX is transit At $2/Mbps. If the DECIX were to disappear tomorrow, the peering population would be $2M per month worse off. The DE-CIX is very valuable to the peering population there.

26. TOP TEN LISTS

27. Top 10 Lists Top n Lists Top 10 Lists Why Peer? Why not Peer? Top 10 ways seasoned Peering Coordinators Contact Target ISPs

28. Top 4 Motivations to Peer • Lower Transit Costs • Lower Latency • Usage-based traffic billing • Marketing Benefits

29. Top 10 Reasons NOT to Peer • Traffic Asymmetry • Transit Sales Preferred • Ports are for Revenue • Keep Transit Prices from sliding • Prefer SLAs • Traffic Ratio denial • Transit is Cheaper • Personality Conflicts • We aren’t true Peers • We don’t have the cycles

30. Top 10 ways to contact Peers • face-to-face at informal meeting in an Internet Operations forum like NANOG, IETF, RIPE, GPF, APNIC, AFNOG, etc., • face-to-face at Commercial Peering Forums like Global Peering Forum (you must be a customer of one of the sponsoring IXes) • face-to-face at IX Member Meetings like DECIX, LINX, or AMS-IX member meetings. • introductions through an IX Chief Technical Liaison or a peer that knows the right contacts • via electronic mail, using the pseudo standard peering@ispdomain.net or a personal contact, • from contacts listed on an exchange point participant list, or peeringdb registrations, • with tech-c or admin-c from DNS or ASN registries, • Google for peering contact AS peering , • from the target ISP sales force, at trade show or as part of sales process, • from the target ISP NOC.

31. Top 9 IX Selection Criteria • Telecommunications Issues • Deployment Issues • ISP Current Presences • Operations Issues • Business Issues • Cost Issues • Credibility Issues • Exchange Population Issues • Existing Exchange vs. New Exchange?

32. Q&A Will this in a document form help you make the internal case for peering? What would appeal to your team?