Digital Transformation – why private enterprises are joining IXPs

Digital Transformation – why private enterprises are joining IXPs

Digital transformation projects are a key business requirement in today’s corporate enterprise world. Enterprises by their nature constantly seek operational efficiency and increased agility in order to better serve existing customers and help open up new market opportunities. This drive to improve business outcomes is also what drives the pursuit of digital transformation to create long-term value for all stakeholders.

The digital transformation process will inevitably include a careful assessment of how applications, databases and computing environments are utilized and how this could be improved so that they perform more efficiently to support business goals better. Sooner or later, connectivity will be assessed, especially if the migration of business critical applications and data to the cloud is part of an enterprise’s digital transformation strategy. This assessment is often triggered when employees with new requirements, such as the need to rent virtual computers, to store database and new cloud-based applications, to access social media and online video for marketing purposes or online CRM platforms for the sales team, push network teams to multiply their network access methods and to constantly improve their network performance. Another specific reason is the wide availability of Microsoft’s Office 365 portfolio of applications among corporates and the possibility to send the associated traffic through public peering. Whatever the driver, network teams in the corporate world find using the public Internet to host mission critical applications to be an obstacle at first. Their second obstacle is that corporate enterprises are not IP companies and so the rapid adoption of systems such as SaaS, PaaS and IaaS raises all kinds of new questions regarding routing control, quality of service or network visibility.

Connectivity is the Key

There are various strategies and project scope for digital transformation, and moving at least some applications to the cloud is usually a first move. According to Gartner, organizations are saving an average of 14% through cloud migration. However, migrating business applications to the cloud whilst maintaining reliable and consistent access to them is a major challenge and can also be very expensive. But business-grade access to applications hosted in the cloud requires adequate links to the cloud-hosting company and the perceived complexity involved and step into unknown territory can be barriers for some enterprises.

There are a good number of recommendations for how best to address the challenges of cloud adoption; some favour a hybrid model, some recommend edge computing but all seem to agree that one of the best ways for businesses to use the cloud more efficiently and securely is through direct, dedicated interconnections between network and cloud providers on the one hand, and users and data on the other.

IXPs: a door to cloud migration

If last year’s growing trend was the adoption of digital transformation projects, this year’s seems to be enterprises joining IXPs. An IXP is a rich ecosystem of carrier networks, CDNs, social networks, cloud and IT service providers who choose to interconnect with a high number of others for the interest of all. Enterprises, seeking to leverage this concentration of connections, are starting to join peering communities but what exactly is behind this trend and what do IXPs provide?

An IXP peering connection is the fastest and shortest route to other peering members and greatly reduces latency, enhances speed and reduces the cost of an organisation’s Internet traffic. It also improves bandwidth and routing efficiency.

The good news is that a variety of players on the cloud are already IXP peering members. By becoming an IXP member themselves, enterprises gain access to business critical applications as well as gaining direct access to national and international carriers and also to non-business critical traffic such as social media and online video, which is driving the explosive growth of their Internet bandwidth. Companies such as Schneider Electric, Lacoste, Saint-Gobain, Air Liquide, Kering, LVMH or AXA technology services have all joined the leading IXP in France.

“Connecting to France-IX has really empowered Schneider in its fast adoption of Cloud technologies,” says Lionel Marie, Network Innovation Leader, Schneider Electric. “From a few Mbps of traffic exchanged 5 years ago, France-IX now delivers around 1Gbps of Cloud and Internet traffic towards Schneider Electric’s 40,000+ employees based in Europe. Business critical traffic such as AWS, Office 365, WebEx, OVH, zScaler, Akamai as well as commodity traffic such as Google, Facebook, YouTube and others, is delivered through the France-IX platform, with unbeatable performance, bandwidth flexibility and price.”

Benefits of IXP membership

The adoption of the cloud by enterprises as a digital transformation strategy has brought about a growing trend that is happening now: more and more enterprises are finding that public peering is a clever business solution. There are a number of excellent reasons for this. Firstly, IXPs offer ongoing value for money: for one monthly subscription, priced in cents per Mbps per month instead of euros per Mbps per month, enterprise members can peer with a myriad of useful service providers including public cloud providers such as Google Cloud Platform, Amazon Web Services and Microsoft Office 365 applications; security apps like Zscaler; collaborative creation environments like Adobe Creative Cloud operators; SaaS and IaaS providers and major content and social media networks such as Webex, Facebook, Twitter, LinkedIn or Dailymotion to access their content directly and cost-effectively.

Secondly, public peering offers latency similar to a LAN and therefore improves performance. Routing is also optimized as up to 70% of traffic can be routed by other peering members and, if the IXP has a Marketplace, there is always the option of purchasing additional services such as IP transit, anti-DDoS, Cloud Direct, paid peering and network traffic intelligence solutions to name just a few. Some IXPs also provide optimization of port filling to make connection management easier.

Thirdly, public peering optimizes network resilience. With track records of proven stability and new SLA offers matching the enterprises expectations, corporate users soon discover that peering can offer the redundancy and the resiliency in their IP network that they have been looking for when it comes to reaching the public Internet. The marriage between enterprises wanting business-grade access to the cloud and IXPs, which historically count operators and content providers as members, is a happy one. Enterprises gain resilience for their critical applications, optimized network performance and a means of carrying non-critical Internet traffic at the lowest cost. Internet Exchange Points gain members, which further encourages more to join and contributes to the overall growth and rewards for the community. Win-win indeed.

Lastly, with service fulfilment counted in term of days instead of weeks, with 70-90% of the routes available on day one thanks to route servers and the freedom from long-term contract duration, IXPs offers the agility any business is looking for when going through a digital transformation of its network.

Initially published in Digitalisation World (April 2018)

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