How to Reduce Bandwidth Costs The Old Fashioned Way

October 27, 2015

Before there was money, there was bartering. Now we call it “Shared Economy.”

PWC, in their report, The Sharing Economy: Consumer Intelligence Series, has devoted an entire White Paper to this “shared economy” phenomenon.

“Around the world, a new wave of peer-to-peer, access-driven businesses are shaking up established categories. Whether borrowing goods, renting homes, or serving up micro-skills in exchange for access or money, consumers are showing a robust appetite for the sharing-based economy.” What We Did and Who We Talked To | The Sharing Economy.

PWC based these statistics about The Sharing Economy on the perception among US adults:

86% agree it makes life more affordable
83% agree it makes life more convenient and efficient
76% agree it’s better for the environment
78% agree it builds a stronger community
81% agree it’s less expensive to share goods than to own them
43% agree owning today feels like a burden

Shared economy is big in the travel industry right now. But it’s also big in technology. We call it Peering.

Sharing Digital Assets Through Peering

Peering increases bandwidth WHEN needed without additional costs.
Peering partners within an exchange share unused bandwidth during peak and downtime.
People still pay for some bandwidth. But they can cover overages and peak time for free with a little help from their peering partners.
Peering stays off of the Internet Service Provider ISP infrastructure and tunnels through the unused network bandwidth of businesses.

To illustrate:

Say you have a friend who lives one street over from your house. You could hop in the car and drive around the block to get there. The road represents the Tier 1 ISP provider.

But if you had a prearranged agreement, you could just cut through a neighbor’s yard and be at your friend’s house in less time, via a more direct route.

That’s Peering.

Peering lets members of an Internet Exchange (IX) share their combined “unused” transit capacity between themselves.

Reduce Bandwidth Cost With Shorter Routes

TechTarget defines “bandwidth” as data transfer rate.

Another way to say it is: bandwidth is the amount of data that can be carried from one point to another within a given time period. Peering takes advantage of that unused bandwidth by allowing businesses to share it.

Peering partners connect through an exchange, such as the NYIIX.

This lessens the amount of “miles” along the ISP provider’s “highway” or infrastructure, lowering latency and reducing bandwidth cost.

You can find out specific details about the benefits of reducing bandwidth cost by clicking the following links, and reading two of our previous posts:

How bandwidth is commoditized
What kind of cost savings can you expect to see

The NYIIX is a Data Center neutral exchange. It’s the largest in the New York City metro area, and it partners with other national and international exchanges.

Sister exchanges include LINX in London UK, and more in Paris and APAC.

How to Take Advantage of Peering

The first step is to join an exchange.

If you’re not sure where to enroll, go to the site of an IX and look at their membership list. NYIIX, for example, has over 200 members and is one of the largest exchanges in the world. A large membership is beneficial to you—the more connections, the better the savings.

Estimate your traffic usage and analyze what your flow patterns look like.
Do you host content and have mainly outbound traffic? If so, you’ll need to connect with consumers and have mostly inbound traffic.
Look at the list of other members in your IX to determine which ones will provide the most advantageous balance and proceed from there.
The exchange will work with you to get a port, a router, and help get you started on setting up BGP routing for your specific configuration.
The Sharing Universe

Collaborative consumption, what’s-mine-is-yours—whatever you choose to call it—the sharing economy stretches your dollar. Peering is a big way companies can reduce costs with little effort.

It’s may be old fashioned, but bartering has built empires throughout history.