Re: NANOG67 - Tipping point of community and sponsor bashing?

[Fredrik Korsbäck <hugge () nordu net>]

On 17/06/16 01:09, Baldur Norddahl wrote:
> Hi,
>
> I have studied Netnod extensively because we want to become members, but we
> can not simply because it is too expensive. I just signed a deal with he.net
> for a flatrate 10G transit for about the same as the 10G Comix port cost.
> The difference being that the he.net port provides much more value and
> besides also provides indirect one-step-away peering with everyone on Comix.
>
> So from my perspective it is clear that Netnod has a pricing problem here.
> Especially for the lower speeds (10G). There is also a value problem
> because the only Comix peer that moves a lot of traffic to us is Akamai,
> and they promised that we could peer directly skipping the middleman.
>
> We are based in Copenhagen. The Netnod IX in Stockholm would provide a lot
> more value, but to get there we have to add the cost for transport and
> after doing that, the comparison to the 10G he.net transit is just silly.
>
> Here is an opinion: If the IX pricing is comparable to transit, the service
> needs to be too. Netnod will need to connect the five (I think there are
> five) Netnod IX'es into one big domain. I am meeting with NL-IX next week
> and as I understand it, that is exactly what they did - we will probably
> buy NL-IX and skip Netnod for this single reason.
>
> I feel that smaller providers are being let down by the IX community at
> this point. The value of "smaller" is going to get larger if the IX
> community does not move with the transit providers. We want to take part
> but there is a limit of how much over price you can sign onto and keep your
> job.
>
> Regards,
>
> Baldur

For me (and middle-sized non-profit ISP) this is something that will eventually solve itself, because of people tend to 
vote with the wallets.

As of now (looking at job's excellent spreadsheet) we can see that regular transit is cheaper or atleast on-par with 
6-8 of the more expensive IXPs in that spreadsheet. We can use hurricane-electrics longlasting google-ad that promises 
$0.26/Mbps on a 10G as a baseline, there is cheaper and much more expensive bits to be had naturally but for the sake 
of argument. While transit is almost always a
better thing then connecting a IXP if cheap bits is of your prime concern, there is still quality to gain by being able 
to take care of some of the traffic yourself over an IXP. But this also has a tippingpoint in terms of price.

The other battle IXPs needs to take into consideration is the price of PNI´s nowadays. It is MUCH easier to get really 
good value from private interconnects seeing as most operators has more traffic to less destinations then what we had a 
few years back, and $BIGCLOUD is usually very forthcoming into helping out with this since the bits is the product they 
sell, not the transport of the bits.

A 10G port at DECIX Frankfurt is 22800EUR/year. For 22800/year you can go out in the market today, buy a jericho-switch 
which does internet-scale tables and BGP and has buffers and all the stuff you need for a peering-edge and will get 1T 
worth of faceplate connectors, support for that same switch for about three years and you still has some change left 
for icecream. Thats alot of possible PNI´s.
Then we need to factor in costs of crossconnects - if you are in a $BIGNAMEDATACENTER  will probably have to pay 
anything between 19 - 300 EURO/month for said crossconnect (or the other company has to, or you split it). If you are 
in $NOTSOBIGNAMEDATACENTER you can perhaps pull the patch yourself and only pay the CAPEX of 11EUR of buying the patch 
so this varies heavily.

What i do when i think about these things is to produce a matrix where the cost of the IXP in that region is measured 
towards a full TCO of a PNI, factoring in what a 10G/100G port costs in terms of buying hardware and then all the OPEX 
surrounding it in terms of hardwaresupport/xconns/powerconsumtion/patching/documentation of patching etc etc.

For me - PNIs make economical sense if i can shave of 313Mbit/s of my IXP (cheap DC / high IXP cost) in the lowside, 
and about 3.67Gbit/s on the highside (expensive DC / cheap IX). And this is with quite high port CAPEX (juniper mx), 
when and if peering-edge is being produced in something like a Jericho-box i expect these requirements will drop to the 
floor.

Last year i added 0 new IXPs, upgraded 0 IXPs, but i added over 30 new PNI's.

If IXPs wants more of those bits, adjusting prices much more aggresively is what can bring this back to their market, 
instead of the datacenter-crossconnect market.

-- 
hugge