Tactic 7. Extend the Dominant IXP

In this tactic, the upstart IXP asks to be a reseller for the dominant IXP by extending the peering fabric into its data center space. In this way, the population of the startup IXP will immediately include all of the dominant IXP participants.

In the U.S. this tactic rarely works because of the asymmetric benefits of the extension. The dominant IXP is unlikely to be willing to support an IXP that could eventually compete with it. When approached, the dominant IXP will likely make the negotiation process long and difficult.

The IXP extension may seem similar to the European IXP model as described earlier, where the colocation site is a separate company from the IXP. The difference though is the ability for the extension colocation center to offer its own peering services as well. Ultimately, the extension site wants to have the stickiness of a network dense IXP and be able to charge the premium prices for its network-dense colocation environment.

If the extension is allowed, the startup IXP can start to build its own critical mass of peers that peer privately on site while still having access to the dominant IXP customers. Once this dual-peered population grows, the upstart has a potentially superior offering to the market and can lure peers over from the dominant IXP.

Value of the IXP = f(p, r, v, m) - c

p: The population

r: The routes available

v: The volume of traffic exchanged

m: The market perception of the IXP

c: The cost of participatioon at the IXP