03 internet transit-playbook
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The document discusses various "tricks of the trade" for purchasing internet transit more cost effectively. It describes 10 tactics including optimizing transit costs by choosing the optimal bandwidth commitment level, gaming the 95th percentile billing model, and multi-homing to connect to multiple transit providers for redundancy and cost savings. The document provides examples and explanations of how these different tactics can help reduce monthly internet transit bills.
03 internet transit-playbook
- 1. The Internet Peering Playbook Understanding the Internet Transit Playbook ©2012 DrPeering Interna:onal Licensed material – [email protected] hAp://DrPeering.net
- 2. 1 Internet Transit Playbook Tricks of the Trade for Connec6ng to the Edge of the Internet 2
- 3. Transit Playbook • “What are the tricks of the trade used when purchasing transit?” • Not recommended – you need to know they exist… …and helps understand the context • I lived in Ann Arbor – maneuvers to get across town – Drive across parking lots – Drive through schools with mul:ple entrances – Drive through gas sta:ons – By applica:on you understand the layout of the town beAer 3
- 4. Problem Set • You have learned everything you need to do this. • Can you come up with any “Tricks of the Trade” on your own? – ways that reduce the monthly Internet Transit costs? • Assume you are purchasing Internet Transit in an Internet Region with: 1. Price Declines Yearly 2. 95th Percen:le Zero Commit for $20/Mbps 3. 95th Percen:le Commits as shown below 4. Open market for Transit • Pricing Varies Widely (20-‐50%) • Terms are nego:able • Highly Compe::ve Market Commit Unit Price MinSpend 10 Mbps $12 per Mbps $120 /month 100 Mbps $5 per Mbps $500 /month 1 Gbps $3.50 per Mbps $3,500 /month 10 Gbps $1.20 per Mbps $12,000 /month 4 100 Gbps $0.70 per Mbps $70,000 /month
- 5. The Internet Transit Playbook 1. Op:mal Internet Transit 2. Gaming the 95th percen:le 3. Mul:-‐home 4. Renego:ate mul:-‐year term contracts every year 5. Play the market 6. Resell Transit 7. Secret Sauce Transit 8. Build into Cheap Transit Internet Region 9. Internet Transit Troughs 10. Capture Content and Access Customers 5
- 6. The Internet Transit Playbook 11. Short-‐term Transit 12. Deploy Trial Gear into Opera:onal Environment 13. Build into beAer Transit Market 6
- 7. Tac:c 1 – Op:mal Transit Commit Unit Price MinSpend 10 Mbps $12 per Mbps $120 /month 100 Mbps $5 per Mbps $500 /month 1 Gbps $3.50 per Mbps $3,500 /month 10 Gbps $1.20 per Mbps $12,000 /month 100 Gbps $0.70 per Mbps $70,000 /month Look at 10Mbps commit & look at 100Mbps commit across the # of Mbps I might send Traffic Commit Unit Price Monthly Bill 800Mbps 10Mbps@ $12 $9600 800Mbps 100Mbps@ $5 $4000 800Mbps 1000Mbps@ $3.50 $2800à$3500 800Mbps 10000Mbps@ $1.20 $960à$70,000 7
- 8. Tac:c 1 – Op:mal Transit Traffic volume 10Mcommit 100Mcommit 1 Mbps= $120 /month $500 /month 2 Mbps= $120 /month $500 /month 3 Mbps= $120 /month $500 /month 4 Mbps= $120 /month $500 /month 5 Mbps= $120 /month $500 /month 6 Mbps= $120 /month $500 /month 7 Mbps= $120 /month $500 /month 8 Mbps= $120 /month $500 /month 9 Mbps= $120 /month $500 /month 10 Mbps= $120 /month $500 /month 11 Mbps= $132 /month $500 /month 12 Mbps= $144 /month $500 /month With 10 Mbps commit it is cheaper than 100M commit if you send a liAle traffic … 8
- 9. Tac:c 1 – Op:mal Transit Traffic volume 10Mcommit 100Mcommit 1 Mbps= $120 /month $500 /month 2 Mbps= $120 /month $500 /month 3 Mbps= $120 /month $500 /month 4 Mbps= $120 /month $500 /month 5 Mbps= $120 /month $500 /month 6 Mbps= $120 /month $500 /month 7 Mbps= $120 /month $500 /month 8 Mbps= $120 /month $500 /month 9 Mbps= $120 /month $500 /month 10 Mbps= $120 /month $500 /month 11 Mbps= $132 /month $500 /month 12 Mbps= $144 /month $500 /month 39 Mbps= $468 /month $500 /month 40 Mbps= $480 /month $500 /month 41 Mbps= $492 /month $500 /month 42 Mbps= $504 /month $500 /month 43 Mbps= $516 /month $500 /month 44 Mbps= $528 /month $500 /month 45 Mbps= $540 /month $500 /month 9 46 Mbps= $552 /month $500 /month
- 10. Tac:c 1 – Op:mal Transit Commit Unit Price MinSpend 10 Mbps $12 per Mbps $120 /month 100 Mbps $5 per Mbps $500 /month 1 Gbps $3.50 per Mbps $3,500 /month 10 Gbps $1.20 per Mbps $12,000 /month 100 Gbps $0.70 per Mbps $70,000 /month optimalTransitMonthlyBill = min(Tv * Pc , C+1 * Pc+1 ) where Tv = transitVolume _ in _ Mbps Pc = unit Pr ice _ at _ commitLevel _ in _ $_ per _ Mbps C = transitCommitLevel _ in _ Mbps C+1 = transitCommitAtNextLevel _ in _ Mbps Pc+1 = unit Pr ice _ at _ nextCommitLevel _ in _ $_ per _ Mbps 10
- 11. Tac:c 2 – Gaming 95th Percen:le • PEERING GEEKY FUN FUN FUN • In this tac:c, an ISP can (theore:cally) create a $0 cost Internet Transit service by leveraging two facets of the pricing models discussed so far: 1) 95th percen:le allows one to burst above the 95th percen:le mark without any cost, and 2) there are some ISPs that sell a zero commit Internet Transit service. Can you guess it? 11
- 12. Tac:c 2 – Gaming 95th Percen:le • 95th percen:le • 5% of month=36hrs • 20 ISPs*35.9 hrs=1 mo • Whoopie: – Free Transit! • Gotchas? 12
- 13. Tac:c 3 – Mul:-‐Home • Many are singly homed – “is negligent” – “doesn’t buy you much” • No redundancy • Conceptual Hurdle 13
- 14. Tac:c 3 – Mul:-‐Home • Lock it down story • Benefits to Mul:-‐ Homing: – Migra:on to Peering – Open Market at home – Open Market at IX – Path to open market at colo 14
- 15. Tac:c 4 – Renego:ate mul:-‐year agreement every year • Highly Compe::ve Market • Lock-‐in for 3 yr. commit? 15
- 16. Tac:c 4 – Renego:ate mul:-‐year agreement every year • Max 18 mo commit • Clever Burst Strategy – Min commit/ monthly burst compei:on 16
- 17. Tac:c 5 – Play the Market • Play ISPs off each other • Beyond the 11th hour • Beyond the signing • Trench warfare? Unethical? • This is the ISP market today. 17
- 18. Tac:c 6 – Resell Transit • Share expense • No service • Friends • Office parks 18
- 19. Tac:c 7 – Secret Sauce Transit • BGP Doesn’t use price for rou:ng decisions – Blend Transit – Requires Exper:se – “Secret Sauce” – Long sales cycle • Example: InterNAP 19
- 20. Tac:c 8 – Build into Cheap Transit Internet Region Expensive Ecosystems – Africa – Middle East – Eastern Europe You are here And you pay too much for transit Cheap Ecosystems – London, Amsterdam, Frankfurt, U.S., etc. 20
- 21. Tac:c 9 – Leverage Traffic Troughs • Manage Traffic • Customer Mix • Timing • Night Bulk Transfers • Slow Bleed – Grid Networks • Wrong Direc:on traffic is free 21
- 22. Tac:c 10 – Capture Content and Access Customers • Keep Traffic On-‐Net • 3 Scenarios • Build Data Centers • Cheap Transit • Free Parking 22
- 23. 11. Short-‐term Transit • 0 commit • Month-‐to-‐month • 6 month • Assump:on: Prices will con:nue to drop yielding beAer deals if you wait. 23
- 24. 12. Deploy Trial Gear into Opera:onal Environment • Cisco loaner gear actually • Sales guy shows up – “coming back from tes:ng next month” • Next month – “problems with the scripts, rerunning this weekend” • Next month – “shipped back – should be here tomorrow” • Next week – “can’t get ahold of shipping” • Next week – “on vaca:on” 24
- 25. Observa:ons: Internet Transit • Simple Service • Customer-‐Supplier Rela:onship • May have SLAs (joke) …And yet s:ll able to do • Transit Commits and crea:ve maneuvers Discounts • Contract Terms • Is a Commodity • Metered Service 25
- 26. Ques:ons? • What other mechanisms have you seen? • Any ideas of ones you would do? • Monthly Auc:ons – automate buy from who ever has the lowest price, un:l that is no longer true • Equinix Direct – facilita:ng the purchase of transit on monthly commit… 26
- 27. Break Coming up next: Internet Peering: Connec6ng to the Core of the Internet 27