Peering Agreements: Revolutionizing Data Center Connectivity With Direct Network Interlinks

As with real-world traffic, all things being equal, the fastest way for data to get from A to B is to go by the shortest route. The shortest route is a straight line from A to B. Direct network interlinks create direct routes between key points for fast data exchange. Here is a quick guide to what you need to know about them.

Understanding peering agreements

Peering agreements are arrangements between two internet networks that allow them to directly connect and exchange traffic without relying on third-party transit providers. These peering arrangements can be public or private.

Public peering

This occurs at Internet Exchange Points (IXPs), where multiple networks interconnect at a shared facility. Networks participating in public peering exchange traffic through a common switch fabric, which can include many networks connecting to each other.

Public peering is cost-effective and scalable, as it allows multiple networks to peer with each other through a single physical connection. That said, it might not always provide the highest level of performance due to the potential for congestion at the exchange point.

Private peering

This involves deploying a direct, dedicated connection between two networks. This type of peering usually takes place in a data center where both networks have a physical presence.

Private peering is typically more expensive than public peering due to the dedicated infrastructure required. In return, however, it offers higher performance with lower latency and greater bandwidth.

Benefits of peering agreements in data centers

Implementing peering agreements delivers numerous benefits to data centers. Here are just five of the main ones.

Improves speed: Peering agreements shorten the distance that data must travel, bypassing intermediate transit networks that can introduce delays. In latency-sensitive applications like online gaming, financial transactions, and real-time communications, lower latency translates to faster response times and a smoother user experience.

Reduces transit costs: Transit providers charge for the volume of data transported through their networks, which can become expensive as traffic scales. Peering allows networks to exchange traffic directly, thus avoiding these fees and resulting in significant cost savings, especially for large-scale data operations.

Enhances network performance: Without the congestion and potential bottlenecks found in third-party transit routes, peering ensures that data packets are delivered more efficiently. This improvement is crucial for maintaining high performance in data-intensive applications such as video streaming, cloud services, and large file transfers.

Increases network redundancy: In the event of a failure in one network, peered networks can reroute traffic through established peering links, enhancing the resilience and reliability of the network. This redundancy is vital for maintaining service continuity and minimizing downtime in critical applications and services.

Boosts interconnectivity and collaboration: By establishing direct connections, networks can work more closely together, leading to enhanced cooperation and the development of better services. This collaborative approach can drive innovation, improve interoperability, and ultimately provide end-users with a more seamless and integrated internet experience.

Implementing peering agreements in data centers

There are five key steps to implementing peering agreements. Here is an overview of them.

Identify potential peers

The first step in establishing a peering agreement is to identify potential peers. This involves researching and selecting networks that would provide mutual benefits through direct connectivity. Factors to consider include the volume and direction of traffic, geographical proximity, and the compatibility of network infrastructure. Network operators often use tools and databases like PeeringDB to find suitable peers.

Evaluate technical and business requirements

Once potential peers are identified, both parties need to assess their technical and business requirements. This includes evaluating network capacity, infrastructure compatibility, and alignment of business objectives. Both networks must ensure that they have the necessary hardware, software, and resources to support the peering agreement. Additionally, they must determine the expected traffic volume and patterns to plan for adequate capacity.

Negotiate terms and agreements

The next step involves negotiating the terms of the peering agreement. This includes defining the scope of the peering relationship, such as whether it will be public or private peering, the duration of the agreement, and any specific conditions or service level agreements (SLAs).

Both parties must agree on traffic exchange policies, security protocols, and any cost-sharing arrangements. Legal and regulatory compliance should also be addressed during negotiations.

Establish physical and logical connections

After finalizing the agreement, the physical and logical connections between the networks need to be established. For public peering, this typically involves connecting to a shared Internet Exchange Point (IXP).

For private peering, dedicated cross-connects are set up in a data center where both networks have a presence. This step includes configuring routers, switches, and other networking equipment to handle the direct traffic flow between the peering networks.

Monitor and maintain the peering relationship

Once the peering connection is live, continuous monitoring and maintenance are crucial to ensure optimal performance. Network operators should use monitoring tools to track traffic patterns, latency, packet loss, and other performance metrics.

Regular maintenance activities, such as software updates and hardware inspections, help maintain the reliability and efficiency of the peering connection. Both parties should also periodically review and reassess the peering agreement to adapt to changing network conditions and business needs.