DE-CIX: Expanding carrier neutral exchanges worldwide

13 November 2012

DE-CIX is taking its highly successful internet exchange model in Frankfurt to the global stage, beginning in the Middle East. Robert Anderson investigates.

When the carrier neutral internet exchange DE-CIX was established in 1995, it was only ever intended to serve Germany. Today, the company is the world’s largest internet exchange with more than 480 networks connected from more than 52 countries worldwide and is building on its success by expanding internationally and launching its own next-generation network (NGN) exchange.

The company’s CEO, Harald Summa, attributes DE-CIX’s phenomenal rise to the movement in traffic "from west to east". This change occurred around the end of the nineties when European ISPs began peering in western European exchanges, shifting away from exchanging traffic via the transatlantic and peering in the US east coast’s MAE-EAST exchange.

Through exploiting Frankfurt’s key geographic location and attracting customers from the east, DE-CIX was able to create an international hub for traffic from Russia and CEE on to western Europe and the US.

As DE-CIX’s popularity grew, it attracted more networks, ISPs and businesses to the German city to peer with one another.

Now the company is hoping to repeat its success in Germany in the altogether different surroundings of the United Arab Emirates through the launch of the Middle East’s first carrier neutral internet exchange.

Bringing gravity to Dubai

Summa believes the deregulation of the international market and the increasing volumes of IP traffic helped drive the need to deliver content closer to the end user. It’s these factors, he says, that are also driving his company’s venture in the Middle East.

DE-CIX was approached by the UAE regulator, Telecommunications Regulatory Authority (TRA), to establish an internet exchange in Dubai and subsequently launched UAE-IX this October.

UAE-IX aims to attract content distributors, international carriers and ISPs to interconnect and terminate their traffic in the Middle East, opening up the market to a wider array of players. "With the exchange we are helping the region to bring in other players that would not have gone there if there wasn’t a neutral exchange," says Summa.

UAE-IX is built upon a fully redundant switching platform within a Dubai data centre and is expected to reduce latency times by 80% and costs by 70% for companies operating in the GCC region.

Summa expects the exchange to be the catalyst for the development of Dubai into an international hub for peering in much the same style as Frankfurt. "What we like to call our 'gravity’ in Frankfurt, we expect to take place in the Middle East as well. The more peering relations that can be established, the more attractive it will become to set up your business there because the closer you can be to your particular customers."

Content restrictions in the Middle East have been a limiting factor for potential investors in the past, but Summa says that DE-CIX hasn’t noticed any restrictions on what is exchanged so far and even suggests that UAE-IX could pave the way for more liberalised content rules in the UAE. He also believes that the exchange will make Dubai a base for the Arabic content market.

Expanding exchanges

UAE-IX is expected to prompt a wider trend to establish exchanges across the Middle East and Africa. Summa argues that it is essential for a country to have at least one exchange to allow its internet market to grow and aggregate national traffic. In favourable geographic locations, he claims, an exchange can help attract international business.

This is increasingly being recognised in emerging African markets, where DE-CIX’s rival, the Amsterdam internet exchange AMS-IX, has recently been involved in discussions for closer cooperation with the Kenya Internet Exchange Point to build an internet hub.

Many of Africa’s northern nations like Morocco, Libya, Egypt and Tunisia are also expected to examine developing exchanges to exploit internet development. There is an increasing need for many countries in the region to decrease cross-border traffic in favour of local traffic, says Summa.

Restrictive regulatory environments raise questions whether these exchange points can follow the same carrier neutral model that has proven so popular in Europe.

Summa, however, is keen to promote the advantages of the carrier neutral European model. "The European business model of IX is mostly based on a community driven approach, so we are a non-for-profit organisation," he says. "I think carrier data centres are not as open and free as a carrier neutral data centre is supposed to be."

Next-generation opportunities

In a bid to extend its portfolio beyond traditional peering, DE-CIX launched its NGN exchange platform at the start of September, which is designed to enable the termination and interconnection of VoIP traffic on its system, as well as video conferencing and special applications.

DE-CIX first identified the need to enter the emerging services market as early as 2003. Having recognised the potential of VoIP, the company realised it knew very little about the voice market and would need a partner with the necessary expertise to set up an exchange. Eventually it selected neutral interconnection provider XConnect.

According to Summa, part of the challenge of launching an NGN exchange is convincing potential customers to abandon their old interconnection agreements in favour of this new approach. "A lot of the companies have their existing interconnection relations and you have to convince them to start thinking a new way."

DE-CIX is now in the process of implementing several letters of intent from customers to interconnect on the DE-CIX NGN, and is negotiating with the 40 companies it first approached with the concept a year ago to gauge interest.

This year, DE-CIX has also sought to address demand for high-speed connectivity in Frankfurt with a 100G DWDM metro deployment in partnership with ADVA Optical Networking.

The deployment was required to support DE-CIX’s expanded footprint, which has grown from one switch to 14 with connections to 15 data centres across Frankfurt.

The service is designed to provide greater choice, allowing ISPs, carriers or application cloud computing vendors to decide where they want to install their equipment in the city. In addition, it is intended to make it easier for them to peer with the rest of the world or establish private connections to partners within Frankfurt’s metro region.

Driven by market development

So where next for the world’s largest internet exchange for the foreseeable future? "We are not driven by money. We are driven by the development of the market itself," says Summa.

"We have to make profit to be able to invest this money into new infrastructure but we are not competing like carriers to get more customers or just to be the biggest for the sake of it."

The DE-CIX CEO predicts there will be a change in the way that IXs are operated in the future, with a focus on service quality expected to take precedent over traditional academic and strongly member driven approaches. This, he says, is because the majority of customers are more concerned with a higher quality of service than being part of community discussions.

Internationally, Summa believes that DE-CIX and other European IXs now have an important role to play in helping to develop exchanges in other countries and regions. "We are helping the rest of the world with our knowledge and our experience to create new exchanges worldwide," he says.

Key facts

History: DE-CIX was founded in 1995 as an environment for the bilateral settlement-free exchange of internet traffic between all types of internet service providers in what is known as peering. The exchange was originally started as a project founded by three German ISPs and is now the world’s largest internet exchange.

Ownership: DE-CIX is carrier neutral and owned by the Association of the German Internet Industry, the world’s largest non-profit association for the internet industry.

CEO: Harald Summa is CEO of DE-CIX and founder and CEO of eco – Association of the German Internet Industry.

Customers: DE-CIX has over 480 customers from over 52 countries, these include content providers and content delivery networks, broadband providers, established telecommunications providers and a mixed group of ISPs. The company’s customers create more than 2 terabits of peak traffic through its public peering in Frankfurt with over 500 private interconnects in service, over 200 gigabit Ethernet ports, and 600 10-gigabit Ethernet ports.

Network: DE-CIX’s technical infrastructure is spread out over a total of 12 data centres operated by ancotel, Databurg, Equinix, Level 3, I.T.E.N.O.S., Interxion, NewTelco, and TelecityGroup within the city of Frankfurt. The centre of the DE-CIX peering star consists of two redundant core switch clusters – one active and the other operated in hot standby mode. These are connected to 14 other switches through fibre-optic cables running at up to 320Gbps.

Products and services: DE-CIX’s products and services include public peering, campus fibre, router and switch co-location, metro VLAN, DE-CIX NGN, blackholing and private interconnects.

Topics: De-CIX, internet exchange, carrier neutral, AMS-IX, UAE-IX