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Is There An Easy Way to Evaluate IXP Benefits?

This presentation at the Global Peering Forum discusses the evaluation of Internet Exchange Point (IXP) benefits. Topics covered include NPV, CAPX, OPEX, modeling, and the comparison of IXP benefits to transit. Learn about the factors to consider and how to build a business case for participating in an IXP. Contact Martin Hannigan for more information.

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Is There An Easy Way to Evaluate IXP Benefits?

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Presentation Transcript

  1. Is There An Easy Way to Evaluate IXP Benefits? Martin J. Hannigan Global Peering Forum NY ’17 Microsoft Cloud Infrastructure & Operations

  2. About Me Interconnection and Edge Strategy BU RE and MIT CRE ’17 Boston, MA USA

  3. What is NPV? Net Present Value Compares an investment made today Against the present value of future cash flow(s) Discounted by a rate of return Comparing doing nothing (transit), to public peering

  4. What is “CAPEX” and “OPEX”? Capital Expenditure • A business expense for a fixed asset that outlives the tax year • Router and switch ports, optics, tools, testing hardware Operational Expense • Normal business expenses • Wages, data center rent, conditioned power, IXP port fees

  5. Building the Business Case Get Costs Together • Capex • Opex Derive the Benefit Targets “TED” • Transit Mb/s • Effective Mb/s • Discount Mb/s

  6. Comparison Modeling Base Modeling • Generally expected results Worst Case Modeling • If you’re wrong Best Case • If you’re wrong again, but in a good way Standard of Care • Risk is always appropriate, but call it out

  7. Modeling IXP Port Purchase

  8. Modeling IXP vs. IXP

  9. Benefits Evaluation Do port fees matter? What about intangibles? IXP benefits vs. transit? Golden Packets? Market Pressure? What if I am upside down?

  10. Questions? Credits • Ben Hedges, for reviewing • Bill Norton, our ’golden packet’ conversations • Job Snijders, and his inspirational hard work. Contact info (and for a copy of the model) • Martin.Hannigan@microsoft.com • LinkedIn http://bit.ly/LMJH-GPF12 • Twitter @theicelandguy • Cell +1-617-821-6079

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