Big Interview

LINX takes first steps into Saudi Arabian IX market

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As it celebrates its twenty fifth anniversary, the London Internet Exchange is working with STC to set up an IX in Jeddah. Alan Burkitt-Gray interviews new CEO Kurtis Lindqvist about what makes LINX different from most companies in the industry.

A new collaboration with STC to build an internet exchange in Saudi Arabia could become a model for further partnership projects in other parts of the world.

The London Internet Exchange – better known as LINX – is just celebrating its twenty fifth birthday with a raft of international announcements. The STC project is one, and another is a partnership with AMS-IX in Amsterdam and DE-CIX in Frankfurt to develop a common application programming interface (API) that will allow users to self-manage their existing and new interconnection services.

These initiatives take place under the watch of a new CEO, Kurtis Lindqvist, who is now in charge of LINX after the internet exchange (IX) was run by John Souter for almost two decades.

Like Souter, Lindqvist is an internet veteran, in the business since the 1990s. He joined LINX as CMO in 2016 after a long spell with Netnod, the Swedish IX. He’s talking to Capacity just a short time into his new role in the company.

First, though, what’s his real name? It’s officially Kurt Erik Lindqvist, but “it’s been Kurtis as long as I can remember”, he tells me.

LINX is different from many IXs and from most other companies in the internet world. Its owned by its members as a not-for-profit organisation, able to focus on investing service and membership fees into strengthening all LINX network services.

This is one of the features that attracted Lindqvist to LINX. He tells me: “LINX is a unique company in that it doesn’t have shareholders or equity. You get a much clearer idea of where it is going. You have to do things where they are needed.”

Does he expect any changes as he succeeds Souter in the CEO role? “No, we have a very clear sense of direction, and we will stay true to it. I see it continuing in this way.” He adds: “I’ve always been fascinated with LINX and the membership aspect of it. I’ve always appreciated LINX’s ethos.”

The company is “three times the size of Netnod”, he points out. During the almost 14 years he was there Netnod grew from a local IX to become the fourth largest European IX, with a global customer base and a global DNS service portfolio.

At the same time he was an active adviser to the Swedish government, advising ministers on data retention and IT strategy in general. He has also been active with the Internet Architecture Board and the Internet Engineering Task Force (IETF) – as well as representing Netnod in a number of policy forums.

He notes on LinkedIn that we was “one of Netnod’s representatives to the National Telecommunication Cooperation Group, the joint crisis management group of Swedish operators run by the Swedish regulator.

Despite its name, LINX reaches much further than London. “We are in London, Manchester, Edinburgh, Glasgow and Cardiff,” he says. In the US, “we have our own presence in northern Virginia”.

He adds: “We have a wide international aspect. Now 850 networks in 82 countries are connected to LINX.” And, of course, “we’ve just launched a collaboration with STC in Jeddah”. This is an intriguing project. JED-IX, the Jeddah IX, will be run by STC, but with LINX’s advice and guidance.

“We were approached by them,” says Lindqvist. “They wanted knowhow. It’s a very exciting project and has massive potential. STC operates in a large country in terms of population and has high internet usage. “It’s an interesting market.”

The IX will serve as a neutral internet traffic exchange platform interconnecting global networks in the Gulf region. LINX will offer its expertise to support the operation of JED-IX as it offers services to network operators and content providers in the Gulf from a fully redundant switching platform located in an STC data centre in Jeddah, Saudi Arabia.

At the time of the JED-IX announcement in December 2018, Souter said: “The exchange will allow networks to stop ‘tromboning’ traffic to London and back again, and will help increase resilience by creating a new centre for interconnection in the KSA.” The partnership is part of Saudi Arabia’s Vision 2030, which seeks to establish the country as a key hub for telecoms connectivity.

Is this possibly the first of many partnerships – or at least a number? “We’d be open to similar partnership projects,” says Lindqvist. “But we need to add value, not compete on price. We need to build on the ethos of LINX.”

What is this ethos? It’s hard to define precisely, but it is part of “the role LINX plays with its members and the community – the role of a neutral player, not taking sides”, says Lindqvist. “Members really value this neutrality. The membership trusts LINX to continue to do this in their own interest.” It’s all to do with trust, and “trust can be a very transient thing”, he warns.

“We connect to each point, and you have to be able to trust us.”

As a not-for-profit company LINX does actually make a tiny profit – just around 1% of its 2018 turnover of £15.8 million, with £11.9 million kept as retained earnings.

Lindqvist observes: “We are not driven by short-term financial gain, so we are not driven by results. Members expect us to run a very stable, and financially efficient, operation, and at a price point – so it’s a scale business.”

Over the 25 years since it was set up LINX has cut its prices “in every year but two”, he says. That, he notes, is an example of what LINX has been able to do by being a not-for-profit company. “Prices have dropped 10-15% year on year.” That creates a return for members.

Overall, “the value this provides is bigger” that if LINX were a conventional for-profit company, he argues.

Would the members ever think of selling, either to an established commercial operation or to a private equity investor, for example? Lindqvist gives a resounding no to that question.

“If we were sold, we’d have different objectives, and trust might not be part of that,” he says. “Trust is something we have to have. There will be no sell-off. I do not see private equity taking over the company.”

He adds: “Either a company has this background or it doesn’t. It’s not a question of allegiance, but you have to have respect for the company.”

Nevertheless LINX has to survive in a changing market. “There is transformation and disruption. We have ethics and there is still room for manoeuvre. It’s not going to be a revolution.” Does he have a whiteboard on his wall listing objectives? “I don’t have a wall chart,” he says.

He gives an example of how the market is changing. “When we started, 85% of the traffic went to single servers in the US,” he says. “Now 85-95% doesn’t leave the access network. That’s a massive change in the industry. And that’s going to be a change for me to work on. There’s a challenge, but from the market, from outside LINX.”

In most ways, LINX operates pretty much like any other company in the market, “except there are no stock options”, he notes. “But otherwise it’s no different to work for.”

So how did Lindqvist get into this business? “I started by founding my own internet service provider in the early 1990s with a friend.” This was Alandia On-line, based in Åland, a group of islands off the south-west coast of Finland where the main language is Swedish.

In the late 1990s he moved to the Swedish operation of EUnet, an early commercial internet access company. That was bought by US telco Qwest, which formed an ill-fated joint venture with KPN, the Netherlands incumbent that was then expanding worldwide.

But KPNQwest went spectacularly bust in 2002, at a point that it was carrying 50% of European IP traffic. “I was there until the end,” recalls Lindqvist. But he was quickly hired by Nednod, “the internet exchange in Sweden – and I stayed there until I moved to LINX”, he says. “I’ve always been involved in network engineering, standards, the IETF and advising the Swedish government.”

And, now, it’s party time. LINX carried its first traffic on 8 November 1994, and on 11 November this year it has a “members’ meeting to mark the 25th anniversary, with friends from the industry. That’s going to be the big celebration,” he says. “There will be key speakers from the early days of the industry, people who built the data centre industry in the UK.” 

And the future? “There are 5,000 networks with AS [autonomous system] numbers in the UK – but only 350 are members,” he says. That’s plenty of scope for growth.

“Having a wide diversity of members is an attraction of LINX. London has long been the hub for transatlantic capacity, linking Asia, the Middle East, Africa and subsea cables. South American networks come into London, and there’s a lot of interest in these international segments.”