Re: cross connects and their pound of flesh

[Mike Hammett <nanog () ics-il net>]

I think that's where the value in a distributed IX comes into play. The more nimble networks can move to different 
facilities while still maintaining the connectivity. Enough of that happens and pricing pressure comes into play in 
other parts of the market (space and cross connects). 

For those of you that operate in many markets, do you see any parallels where one operator has (or had) a hold on the 
market (Chicago Equinix and Miami Terremark for instance) compared to more diversified markets like NYC (due to a 
variety of IXes) or Seattle (due to SIX)? 




----- 
Mike Hammett 
Intelligent Computing Solutions 
http://www.ics-il.com 



Midwest Internet Exchange 
http://www.midwest-ix.com 


----- Original Message -----

From: "Dave Temkin" <dave () temk in> 
To: "Brandon Ross" <bross () pobox com> 
Cc: "North American Network Operators' Group" <nanog () nanog org> 
Sent: Sunday, June 19, 2016 8:19:16 AM 
Subject: Re: cross connects and their pound of flesh 

On Sat, Jun 18, 2016 at 12:54 PM, Brandon Ross <bross () pobox com> wrote: 
> Value based pricing is all the rage these days, which is why they charge 
> you so much for cross connects. 


Exactly. Not that I don't like free cross connects (they're the bees knees, 
in fact), but at the end of the day, an existing colo operator is not going 
to go from paid->free cross connects without extracting that pound of flesh 
(read: sweet sweet 100% pure margin) from somewhere else. Your space and/or 
power prices will go up to backfill that lost profit. That said, those of 
us that buy a decent amount of colo prefer to trade in the value of the 
asset leased/purchased - space & power - as we have real world indexes to 
tie the underlying cost to for negotiation purposes. 

And as colo operators get freaked out over margin compression on the 
impending 10->100G conversion (which is happening exponentially faster than 
100->1G & 1G->10G) they'll need to move those levers of spend around 
regardless. 

-Dave