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March 2018

DE-CIX’s Smash-Hit on Broadway: Peering Network Recast as a “Multi-Talented”,
Data-Center-Neutral Interconnect Platform

DE-CIX’s Smash-Hit on Broadway: Peering Network Recast as a “Multi-Talented” Data-Center-Neutral Interconnect Platform

In a huge metropolis like New York City, network change occurs slowly and deliberately because change is so enormously expensive — whether it’s digging up a city street, landing an undersea cable, or getting permits to build mobile towers.

Some things remain constant for nearly a century: The same 60 Hudson Street building that was the hub of Western Union’s telegraph business in the 1930s is now home to DataGryd, the largest cross-connect point and data center in the City.

Likewise, Crown Castle, the $3.6 billion-a-year mobile and fiber infrastructure firm, has a decades long history in the City, and it recently invested heavily again in NYC, confident that holding network assets in America’s financial capital will pay off for decades to come.

Well, then.  So how do you explain the meteoric rise of DE-CIX in metro New York?  In a little more than three years, this relative unknown Frankfurt-based internet exchange provider has grown to 160+ networks, making it nearly the largest network provider in the city — and the seventh largest in the United States!

The answer, my friends, is two-fold: 1) in the networking business, over-the-top innovation tends to upset “safe” business models, and 2) DE-CIX employs clever guys who think outside the box and know what customers are looking for, especially when it comes to making deals with data centers, colocation providers and network providers.

Ironically, the focus of DE-CIX’s innovation is peering exchanges, a common efficiency play of ISPs — and a corner of the market long considered mature.  Basically, a peering exchange allows an ISP to bypass paying internet transit fees, plus deliver direct connections that increase network quality and simplify traffic management.

But DE-CIX has greatly enhanced the internet exchange and turned it into a full-blown interconnection platform for ISPs, enterprises, and anyone connecting to the cloud.  It’s a fascinating story and told with great enthusiasm and detail by DE-CIX’s GM and Vice President of North America, Ed d’Agostino.

Dan Baker, Editor, Top Operator: Ed, to begin, I suspect many people have not yet heard of DE-CIX, so can you explain a bit of your history?

Ed d’Agostino: Sure, Dan.  DE-CIX started operations in 1995 in Frankfurt, Germany.  Twenty-two years later, we now operate in three continents, serving 13 different markets including those like New York and Dallas here in North America.  We do have Istanbul, Madrid, Marseille, Palermo in the South of Europe and we run exchanges in Dubai, and the latest one in Mumbai.  Last but not least we operate four exchanges in our home market in Germany — in Frankfurt, Munich, Hamburg, and Dusseldorf.

Interestingly, Frankfurt is the largest peering ecosystem in the world by traffic.  Very recently we had a new all time peak of 6 terabit plus of traffic exchange, which makes Frankfurt the largest interconnection platform in the world.  In Frankfurt, we connect 800 networks from 75 nations.

Great, now please tell us about your surprising success in New York.  What’s caused all the excitement?

Technically, our New York infrastructure is fairly straightforward: we are accessible from over 100 unique data center and colocation points across New Jersey, Manhattan, and in April 2018 we will be the first exchange on Long Island — and we run our own backbone between the different boxes.  This means with just one cross-connect to the DE-CIX axis point, a customer can connect to the whole platform and can see all other networks regardless of what data center they are located in.

And on top of this infrastructure we’ve created a model for a data-center-neutral internet exchange — and this “neutral” capability contrasts us very sharply with the Equinix model where the exchange only operates in its own data centers.  I think this is a key reason why we’ve been so successful in New York.  Because we allowed the customer to not be locked into one facility only, customers appreciate the greater comfort and convenience of this new freedom.  In turn, DE-CIX gained some nice gravity in the New York metro.

It’s a tremendous idea.  You have elevated a run-of-the-mill internet exchange into something far more potent.  How did this idea develop?

Well the idea took shape three years ago as we examined the ecosystems we created in various markets.  We realized that the many peering exchanges we built would be a perfect platform for growing interconnection services.

After all, in Frankfurt, New York, Dubai, and Madrid, the major cloud service providers are already present: Amazon, Google, Microsoft, you name it — even SAP, Oracle, Salesforce and many more.  So why not take advantage of this existing ecosystem to enable interconnection services?

In the past, exchanges were for public peering only.  But DE-CIX has changed this dramatically.  In addition to public peering (one-to-many), you can also do private peering — which means one-to-one or one-to-two or -three, etc. through a closed user group.  Furthermore, through our commitment to partnerships we are able to provide data centers and colocation providers equal access to a neutral peering platform that can reach customers in facilities like Equinix.  In addition, since interconnection is our core service, partnering with transport carriers for connectivity to our platform is also an important initiative for us.

You can buy yourself transit; you can connect to the cloud.  So all of sudden we become a kind of multi-talented service platform.  We offer a variety of interconnection services and the customer decides what type of interconnection he or she wants to have.  We just provide the theme park and the customers decide which attractions they want to ride.

It would be great if you could break down the major new uses of your internet exchange to show the new capabilities.

Sure, Dan.  I’ll go right down the list and discuss the most important ones:

1.  Cloud Connectivity

One of the useful connection services is cloud connectivity and cloud exchange service.  So today there are 29 of the biggest certified cloud service providers directly connected to our platform.

So, all other networks or enterprises who want to get cloud connectivity or want to bundle cloud connectivity for their end customers can do it within the same ecosystem using the same infrastructure they have already invested in.  If they so desire, they can even monetize the connection — buy and sell it.

We named our cloud connectivity service, DirectCLOUD, and it features point-and-click versatility in setting up ports, direct relationships, and cloud providers.

To begin, an enterprise creates a VLAN to the cloud service providers connected to the platform.  And the enterprise can do this themselves without any handholding from a cloud provider, ISP or telecom.  Further, the enterprise could say: “OK, I want to get some cloud connectivity from AWS, use some resources of Google Cloud, and also manage my Azure express routes.” And with DirectCLOUD, all these connections are managed from one portal.

2.  Interconnection Versatility

Once a customer is connected to a DE-CIX platform anywhere on the globe, the platform can be used to interconnect with many different parties at various bandwidths.

A practical example: an ISP can use the same port or bundle of ports for aggregating cloud connectivity with all well-known cloud service providers who are on the platform.  So instead of maintaining hundreds of bilateral relationships, aggregation occurs at one point and so all those hundreds of bilateral deals become unnecessary.

What’s more, the ISP may even be able to save itself the expense of installing equipment at various sites linked to AWS, then maybe Google Cloud is not in the same domain, so they would have to install equipment at another building, and so forth.  Lots of efficiency is gained by using these new interconnection services.

Finally, our GlobePEER remote service will be available between New York and Dallas.  This allows companies to virtually connect from one peering platform to another and reach peers in both markets on a single physical port.

3.  Closed User Groups

You can also use the existing ecosystem to create closed user groups.  In the finance industry, for example, you have companies like Thomson Reuters and Bloomberg who need to distribute traffic to hundreds of financial institutions.  They can do so through closed user groups that may offer a stronger security policy or better SOA capability, for example.

Such a closed used group network is useful in many industries.  And the user group administrator can set its unique network policy, higher security, or quality standards very efficiently through the interexchange network we enable for them.

4.  Traffic management & security

Having a direct interconnection means you know where your traffic comes from and where it goes to.  If you are on transit, you do not know how your traffic flows.

And so a direct connection is hugely significant for security.  In fact, it gives you a higher level of security.  Here’s a simple example.

Banks operate a network to support their online banking operations, and you can be sure that any attack on their network will come from a network that wants to stay anonymous.

But anonymity can only occur over transit traffic.  Why?  Because in a transit network, you have no idea how many operators your traffic crosses, and that makes you vulnerable.  However, if the bank peers, the bank will see immediately who tried to attack its systems and can therefore mitigate faster and so security is much improved.

With peering then, an enterprise or a large bank, for instance, can decide who it peers with.  So what do they do?  They make direct interconnect to well-known cable operators and internet access providers in the U.S.  They know a cable provider will not try to attack a large bank.  A major content provider will not try to attack a large bank and an individual peer can be turned down or blackholed. 

Those people who try to attack the network of a bank or any other type of enterprise connected to the platform want to stay anonymous.  Those are the gangsters, and they don’t want to show their faces.

Congratulations on these many innovations, Ed.  DE-CIX has clearly delivered a paradigm shift and opened peoples’ eyes to new ways of interconnecting.

Thanks, Dan.  As we all know, the past was extremely difficult for enterprises and ISPs because they would need highly experienced engineers to maintain interconnections — a complex, human resource-intensive task.

But they can now use powerful new functionalities on an internet exchange platform: peering (of course) but also a cloud exchange, a closed user group exchange, GlobePEER remote and a better security service linked only to trusted network partners.

We’re obviously thrilled that the market is buying into this.  With our New York success a prime example — we’ve proven how we can come into a regional market and become a leading force by providing better interconnect services and improving the quality of connectivity in that area.  And we’re in the process of doing the same thing in Dallas.

So our ambition is to continue to be an active player globally — and introduce new internet exchanges in markets where we see opportunity for growth.

Copyright 2018 Top Operator Journal

 

About the Experts

Ed d'Agostino

Ed d'Agostino

Ed d‘Agostino serves as General Manager and Vice President of DE-CIX North America.  He joined DE-CIX North America in April 2014, where within 18-months d’Agostino led the team in signing more than 100 customers garnering global recognition by Capacity for awards first in 2014 as the Best North American Project and aiding the company to win the Best Internet Exchange award in 2015.

Prior to DE-CIX, d‘Agostino was the Director of Sales, IP Exchange Services for PTGi’s Layer 2 IP Exchange platform where for eight-years he led all sales activities across North America, Europe and Asia.

d‘Agostino also served as the Director of Business development for CRG West (now Coresite), a Product Director for Metro Metromedia Fiber Network (now Zayo) and Teleport Communications Group (now AT&T).  d’Agostino earned a M.B.A. from the University of Virginia, Darden Graduate School of Business Administration and a B.A. in Economics from Dartmouth College.

He is a recognized source and commentator on topics, including peering, Internet Exchange and IP traffic worldwide.   Contact Ed via

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