Experts: Too Early to Tell Whether Open-IX Will Reach End Goal

While it has enjoyed support by many big-name companies, including wholesale data center providers like Digital Realty Trust, CoreSite and DuPont Fabros, and Internet companies like Twitter, Netflix and Google, future of Open-IX, the initiative aiming to create more competition in the U.S. Internet exchange market, remains uncertain.

Its future will depend on whether or not Open-IX-certified exchanges will attract enough members to truly compete with a handful of data center providers that operate the nation’s largest Internet exchanges. These are providers like Telx and Verizon, but the biggest one is Equinix, which controls nearly all key exchanges in the U.S.

The Open-IX association was created last year. It has created standards it uses to certify Internet exchanges and data centers that host them. The idea is to have a common set of standards to create a distributed exchange, and that way reach a critical mass of participants that will not be limited to one peering point or one building.

On Tuesday, a conference in Palo Alto, California, called Peer 2.0 hosted a panel discussion on Open-IX, its purpose and its potential effect on the market.

Panelists agreed that Open-IX has so far enjoyed positive momentum, but it is too early to tell whether or not it will actually attract the amount of members necessary to make a significant impact on the market overall. It will take several years before it will be possible to tell how big that impact will be.

Good early signs

Keith Mitchell, one of the founding board members of LINX (London Internet Exchange), said two exchanges have been certified so far, and the organization was in discussions with three more. Mitchell is an Open-IX board member.

Al Burgio, founder and CEO of IIX, a company that operates a sort of a cloud for global network peering, said one positive effect Open-IX already had was greater awareness of interconnection and peering in the industry. “Open-IX has brought a lot of visibility to interconnection and peering,” he said.

“I think that helps all market participants. That’s definitely been a positive byproduct of Open-IX coming into existence.”

No company today is actually moving from a big commercially operated exchange to an Open-IX-certified one. Vinay Nagpal, director of carrier relations at DuPont Fabros Technology and an Open-IX committee member, said early adopters of Open-IX were using it for redundancy.

DFT was an early supporter of Open-IX and had data centers in Ashburn, Virginia, and Piscataway, New Jersey, certified to host the exchanges. AMS-IX (Amsterdam Internet Exchange) is already up and running in the Piscataway facility, and LINX NoVA (a U.S. subsidiary of LINX) has set up shop in Ashburn.

For DFT, participation in Open-IX and hosting European Internet exchanges was a way to get into retail colocation. Until recently, the company has only been doing large multi-megawatt wholesale deals. Now, by focusing more on interconnection, it hopes to attract a wider variety of customers, which will increase the value of its properties.

That strategy has already borne some fruit. Nagpal said some early adopters have already taken space with DFT to get access to the peering infrastructure.

‘Jury’s still out’

Robert DeVita, general manager at Cologix, a retail colocation provider, said the company already had multiple member-operated Internet exchanges at its facilities and was still trying to figure out what the value of having Open-IX-certified exchanges would be.

He said he supported the initiative and the standards the organization had come up with for facilities to be good hosts for exchanges. Answering the moderator’s closing question about the point of Open-IX, however, he said, “I don’t know. Jury’s still out.”

Mitchell explained that Open-IX had multiple objectives, the big overarching one being a level playing field. Another goal is to lower the cost of peering, but without actually dictating the costs.

“The objective is very much to lower the costs,” he said.

To achieve both of those objectives, however, Open-IX membership will need to reach a certain critical mass of participants. There has to be enough players for companies to justify going into an Open-IX-certified facility instead of a massive Equinix-operated exchange.