Internet exchange points (IXPs) play a key role in the internet ecosystem. Worldwide, there are more than 400 IXPs in over 100 countries, the largest of which carry peak data rates of almost 10 Tbps and connect hundreds of networks. IXPs offer a neutral shared switching fabric where clients can exchange traffic with one another once they have established peering connections. This means that the client value of an IXP increases with the number of clients connected to it.

Simply speaking, an internet exchange point can be regarded as a big Layer 2 (L2) switch. Each client network connecting to the IXP connects one or more of its routers to this switch via Ethernet interfaces. Routers from different networks can establish peering sessions by exchanging routing information via Border Gateway Protocol (BGP) and then send traffic across the Ethernet switch, which is transparent to this process. Please refer to Figure 1 for different peering methods.

Figure 1. Different peering methods

IXPs allow operators to interconnect n client networks locally across their switch fabrics. Connectivity then scales with n (e.g., one 100-Gbps connection from each network to the switch fabric) rather than scaling with n² connections, as is the case when independent direct peering is used (e.g., one 10-Gbps connection to each of n peering partners). This leads to a flatter internet, improves bandwidth utilization, and reduces the cost and latency of interconnections, including in data center interconnect (DCI) applications. To avoid the cumbersome setup of bilateral peering sessions, most IXPs today operate route servers, which simplify peering by allowing IXP clients to peer with other networks via a single (multilateral) BGP session to a route server.

IXPs can be grouped into not-for-profit (e.g., industry associations, academic institutions, government agencies) and for-profit organizations. Their business models depend on regulation and other factors. Many European IXPs are not-for-profit organizations that rely, for example, on membership fees. In the U.S. most IXPs are for-profit organizations. It is important to understand that all IXP operators, while still providing public neutral peering services, may also provide commercial value-added services (VAS), such as security, access to cloud services, transport services, synchronization, caching, etc.

Over the past few years, content delivery networks (CDNs) have been major contributors to the traffic growth of IXPs. IXPs are critical infrastructure for CDNs to keep their transport costs under control. This is facilitated by putting content caches into the same locations as IXPs put their access switches. Often these locations are neutral colocation (colo) data centers (DCs).

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