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Purchasing Internet networking services: Best practices

Once you understand your priorities and understand the market, sifting through network service providers should be easier than you think.

Jay Adelson

Setting up Internet networking for your business can be like shopping in the Tamal district in Katmandu. Your success depends on ignoring the hype, understanding the dynamics of the market and knowing what you want. This focus can help you avoid the mistakes of committing to long-term contracts to network service providers (NSPs) at high prices. Once you understand your priorities and understand how the market has shifted, sifting through the details should be easier than you think.

The first step toward setting up Internet bandwidth is deciding how important the Internet is to your business -- in dollars. Nobody is saying calculating downtime costs will be easy, but it will provide a foundation for disaster recovery budgeting in many other areas. Only with this information can you determine a budget to start with.

The next step is to determine what Internet is important to your business. Do you pay the same amount for calls down the street as you pay to call Japan? The Internet can be the same. There are NSPs that specialize in accessing the entire planet, and there are NSPs that specialize in accessing a subset of Internet users. Determine where your traffic is headed. You may find that some NSPs are less expensive and provide greater quality to your destinations than a generic, large company brand.

Many enterprises find that most of their traffic is destined to NSPs or Web sites that provide free or cheaper access through a traffic-exchange relationship known as peering. In these cases, simply hooking directly into these Web sites and NSPs can reap rewards of huge cost savings per month at better performance. Yahoo, for example, passes almost half of its traffic directly to users in this way for free at Internet exchange points that also provide collocation.

Now that you have a sense of what Internet is important to your business, the next question is how to deliver your users to these destinations. Typical NSPs will tell you all about their wonderful redundancy, or even tell you to connect to them twice. Ignore this. The reality is that no NSP is infallible. The only way to guarantee uptime is to connect to multiple NSPs at the same time.

Typical Internet bandwidth is sold using a 12-month term and minimum bandwidth commitment. After you buy a single contract with a large commitment to get the price down, you are in a hostage scenario, with little budget left to connect to a second or third network. The secret is that we are currently in a buyers' market for bandwidth. Often, connecting to two, three or even four networks can cost less than 5% more than connecting to a single network. If you tell a network service provider that you will be using more than one network, you'll find prices, commitments and terms drop by a third or even half…but only if you ask. The more contractually detached you can be from NSPs, the safer you will be and the greater flexibility you will have to adjust to the growth of your business. A good rule of thumb is to set yourself up so you can change providers in a pinch. To do this, getting your own IP addresses from a neutral mediation service or the American Registry of Internet Numbers would be a good start. The investment in a larger router is a small price to pay for this flexibility. If you use neutral mediation technologies, such as services purchased over a neutral switching fabric, you avoid contracts with NSPs and can switch NSPs as often as every 30 days.

Some systems provide the ability to connect to multiple NSPs simultaneously. These systems offer you each branded service provider at competing prices, not a single NSP with a blended price. When shopping, remember that lesser known NSPs often have more capacity on newer equipment at very competitive prices. Since these networks spend less on marketing, ask a mediator, such as a neutral collocation provider, for a complete list of networks servicing their locations.

For quality, a simple rule is that the most direct access to your destination will generally perform better. As stated before, companies like AOL and others offer direct connections to their networks at much lower costs through neutral mediation technologies, delivering much greater performance to a wide group of users. The more networks and content to which you connect directly, the better the results, and the more control you have over the outcome.

In closing, understanding your Internet networking usage priorities, researching market dynamics and leveraging connectivity tactics such as peering can result in a world of difference in achieving favorable rates, high performance levels and flexible terms with NSPs. Many of today's leading businesses are finding that a flexible connectivity architecture through a neutral collocation provider that enables direct interconnectivity with multiple NSPs can offer the best solution for meeting these cost, performance and growth needs.

About the author:
Jay Adelson is the founder and chief technology officer of Equinix, where he provides strategic leadership in delivering network-neutral data centers and Internet exchange services for enterprises, network service providers and other Internet businesses. He is responsible for the design of Equinix's 14 IBX centers, as well as the design and deployment of various Equinix network interconnection services.

This was last published in June 2004

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