Very good write up Faisal.
Cogent is a perfect example of how to start a network and peer with anyone and
everyone you can. Back in the early 2000’s Cogent’s business model was to peer
with anyone who would. They were selling dirt cheap Internet then. I was
buying a server in Chicago on a Cogent connection for $50 a month and had 100
megs of unlimited IP. That was a huge deal in 2004. Their network would grind
to a halt at times due to oversubscription.
Then you had the great de-peer of Cogent a few years later. By this time
Cogent was hosting a significant amount of web-sites. ATT and the others
decided to de-peer because the traffic ratios were not in their favor. This
lasted about 2 days until they received enough complaints from their own
customers they brought the sessions back up. This was the beginning of peering
as we know it today.
Anyway, not sure where i was going with that. LOL. I don’t like to be
in the IP transit arena. It’s all about how cheap can you get it. Instead, I
have been focusing on value to that pipe. VOIP, security, peering, and other
managed services make you more valuable to the customer.
Justin
---
Justin Wilson <j...@mtin.net>
http://www.mtin.net <http://www.mtin.net/> Managed Services – xISP Solutions –
Data Centers
http://www.thebrotherswisp.com <http://www.thebrotherswisp.com/> Podcast about
xISP topics
http://www.midwest-ix.com <http://www.midwest-ix.com/> Peering – Transit –
Internet Exchange
> On Jul 12, 2015, at 11:20 PM, Faisal Imtiaz <fai...@snappytelecom.net> wrote:
>
> hmmm, yes and no, sort of... a lot of it depends upon the perspective one is
> looking at...and of course there are a number of factors that go into the
> equation..
>
> Let's take a look at a Tier 1 providers, they don't pay anyone for IP
> Transit, but they sell IP transit.. so how do they price it ?
> ... Something along the lines of cost of operating the network + ROI +
> Profit + some fudge factor = pricing for IP transit.
>
> Now let's take a look at Tier 2 providers, they are paying someone for IP
> Transit, and do a lot of peering (hopefully).... In this case ,the are
> pricing IP Transit competitively lower than Tier 1 folks and then doing a lot
> of peering to reduce their expense with Tier 1... so their cost of IP transit
> formula is something along the lines of...
> cost of operating the network + ROI + Profit + Some fudge factor + cost
> of IP transit = pricing for IP transit...
>
> Now let's take a look at Tier 3 or some of us who are operating Last Mile
> networks....
> We have been conditioned to think of IP always as IP transit.....only
> recently we started seeing benefits of settlement free peering.... but let's
> put this aside for a min....
> Most of us (access networks) buy an over commit of IP transit ..... so
> now here is a big question, What is the COST of Excess un-used commit that is
> not used in that month... !
> Just like an empty hotel room, and un-occupied airline seat, etc etc ==
> $0 , because we tend to expense our costs over the existing sources of
> revenue...
>
> When one starts to think of it in this manner, the equation changes...e.g. if
> we have excess commit, one can actually sell IP transit for lower cost than
> what they are paying for, and have it drop to the bottom line. And if you
> want to go a bit deeper into this... sell cheap bandwidth to hosting
> providers, their ratios are opposite to ours, thus even a greater leverage....
>
> So bringing this back to a full circle.... when we say the race to the
> bottom, and what is the bottom ? well based on above formulas it will be as
> follows:=
> Cost of operating the network + ROI = pricing for IP
> transit... the other two factors disappear....and now you have pricing based
> on network operational efficiency...
> (Even today, in many cases, (e.g data center or POP) the
> cost of selling, to a customer, 10meg, 100meg or 200meg could be the same...)
>
>
> :)
>
>
> Faisal Imtiaz
> Snappy Internet & Telecom
> 7266 SW 48 Street
> Miami, FL 33155
> Tel: 305 663 5518 x 232
>
> Help-desk: (305)663-5518 Option 2 or Email: supp...@snappytelecom.net
>
> From: "Chuck McCown" <ch...@wbmfg.com>
> To: af@afmug.com
> Sent: Sunday, July 12, 2015 10:07:39 PM
> Subject: Re: [AFMUG] Anyone heard of GTT
>
> On this scale, there is almost no marginal expense involved in giving the
> customer more bandwidth for the same money or the same bandwidth for less
> money. It is a race to the bottom, just like it was for the long distance
> providers. Who has a long distance phone bill these days?
>
> Perhaps all the big boys will give you as big of a pipe as you want for free
> and charge you for usage. UBB. Maybe Doug Clark was right after all...
>
> From: Paul Stewart <mailto:p...@paulstewart.org>
> Sent: Sunday, July 12, 2015 2:22 PM
> To: af@afmug.com <mailto:af@afmug.com>
> Subject: Re: [AFMUG] Anyone heard of GTT
>
> Maybe .. but (just my opinion) where is rock bottom? Out with the old and in
> with the new … the old was cheaper to run but you need the new for capacity.
> It’s a never ending circle as we know but the raw cost to push the bits
> doesn’t really come down that much so how can it go much lower – all from the
> perspective of an IP Transit provider.
>
>
> I’ve seen several transit providers actually raise their prices in the last
> couple of years a small amount as they realized that “holy crap, we need to
> start making money at this”. One company I worked with not too long ago told
> me that when they sell a 10G port (with 10G commit) that they bank on their
> customers not using more than 30% of the actual pipe – if all their customers
> utilize 70% of the pipe during peak times then they lose money for the first
> 2 years of a 3 year contract. That’s not an ideal business model .. BTW,
> their average peak usage on that product in all markets was 68% I was told.
>
>
> From: Af [mailto:af-boun...@afmug.com] On Behalf Of Mike Hammett
> Sent: Sunday, July 12, 2015 10:48 AM
> To: af@afmug.com
> Subject: Re: [AFMUG] Anyone heard of GTT
>
> It'll go down. It always goes down. With 40GigE and 100GigE being available
> at the cost of 10GigE 10 - 15 years ago, it won't be long before 40 and 100
> are commoditized. There's bigger and bigger channels on the way.
>
>
>
>
> -----
> Mike Hammett
> Intelligent Computing Solutions
> http://www.ics-il.com <http://www.ics-il.com/>
>
> From: "Paul Stewart" <p...@paulstewart.org <mailto:p...@paulstewart.org>>
> To: af@afmug.com <mailto:af@afmug.com>
> Sent: Sunday, July 12, 2015 9:42:55 AM
> Subject: Re: [AFMUG] Anyone heard of GTT
>
> Yup …. The market is hitting pretty much as low as it can go in my opinion ….
> There’s still room for a bit of movement but in major core centers I can’t
> see where IP Transit providers can afford to go much lower. There are
> already providers on the market that are running at very very thin returns –
> should be interesting to see how that “pans out” over the next few years.
>
>
> I think things are going to land at $0.35-$1.00 for low end to top end
> depending on providers… at least that’s what I’m seeing from our experience
> pretty much
>
>
> From: Af [mailto:af-boun...@afmug.com <mailto:af-boun...@afmug.com>] On
> Behalf Of Faisal Imtiaz
> Sent: Saturday, July 11, 2015 9:09 PM
> To: af@afmug.com <mailto:af@afmug.com>
> Subject: Re: [AFMUG] Anyone heard of GTT
> FYI, based on our experience.... at 100G Levels most IP Transit providers are
> @ very similar Monthly MRC.
>
> And yes, due to limitations of 100g ports on a line card and expensive
> optics, in many cases 10g LAG Groups are less expensive to implement.
>
>
> Faisal Imtiaz
> Snappy Internet & Telecom
> 7266 SW 48 Street
> Miami, FL 33155
> Tel: 305 663 5518 <callto:305 663 5518> x 232
>
>
> Help-desk: (305)663-5518 <callto:(305)663-5518> Option 2 or Email:
> supp...@snappytelecom.net <mailto:supp...@snappytelecom.net>
>
> From: "Paul Stewart" <p...@paulstewart.org <mailto:p...@paulstewart.org>>
> To: af@afmug.com <mailto:af@afmug.com>
> Sent: Saturday, July 11, 2015 5:04:19 PM
> Subject: Re: [AFMUG] Anyone heard of GTT
>
>
> True… and it’s a one time cost …
>
>
> Obviously depends on the provider for that monthly pricing – that’s pretty
> low MRC except for HE crap…. When the market is used to minimal setup fees
> for ports though, the 100G stuff still stands out… the linecard(s) are one
> thing to recover but the price of the optics is still stupidly expensive too
> ..
>
>
> The biggest attraction for me has been in “higher traffic” networks when you
> run into limitations on how many members can be in a LAG … so you go from 10G
> LAG’s to 100G LAG’s
>
>
> From: Af [mailto:af-boun...@afmug.com <mailto:af-boun...@afmug.com>] On
> Behalf Of Faisal Imtiaz
> Sent: Saturday, July 11, 2015 3:58 PM
> To: af@afmug.com <mailto:af@afmug.com>
> Subject: Re: [AFMUG] Anyone heard of GTT
> Hmmmm, considering a full 100g port of service would be priced at $35,000 to
> $45,000 / Month, it needs a $150,000 to $500,000 Router to handle, a one time
> charge of $30,000 to $100,000 is negotiable and rather an irrelevant figure
> in that picture
>
>
> Faisal Imtiaz
> Snappy Internet & Telecom
> 7266 SW 48 Street
> Miami, FL 33155
> Tel: 305 663 5518 <callto:305 663 5518> x 232
>
>
> Help-desk: (305)663-5518 <callto:(305)663-5518> Option 2 or Email:
> supp...@snappytelecom.net <mailto:supp...@snappytelecom.net>
>
> From: "Paul Stewart" <p...@paulstewart.org <mailto:p...@paulstewart.org>>
> To: af@afmug.com <mailto:af@afmug.com>
> Sent: Saturday, July 11, 2015 2:09:24 PM
> Subject: Re: [AFMUG] Anyone heard of GTT
>
>
> Well there is no question that 10G ports and LAG’s of 10G are more popular
> but the number of 100G ports being sold for IP Transit is definitely picking
> up quite noticeably J The biggest challenge that I have run across is pure
> economics – the cost of the ports makes it hard for them to sell them to
> customers at much discount. The quotes on 100G transit that I have seen
> typically have a $60k-$100k per port setup fee to try and recover a portion
> of costs up front. The attraction is higher in markets where x-connect
> monthly fees are quite high.
>
>
> From: Af [mailto:af-boun...@afmug.com <mailto:af-boun...@afmug.com>] On
> Behalf Of Mike Hammett
> Sent: Friday, July 10, 2015 8:13 AM
> To: af@afmug.com <mailto:af@afmug.com>
> Subject: Re: [AFMUG] Anyone heard of GTT
> http://www.telecomramblings.com/2015/07/thursday-bytes-gtt-telepacific-vxchnge-netrality-faction/
>
> <http://www.telecomramblings.com/2015/07/thursday-bytes-gtt-telepacific-vxchnge-netrality-faction/>
>
>
> 100G ports to customers still isn't common. It happens, but isn't common.
> It's mostly for internal connections.
>
>
>
>
> -----
> Mike Hammett
> Intelligent Computing Solutions
> http://www.ics-il.com <http://www.ics-il.com/>
>
> From: "Paul Stewart" <p...@paulstewart.org <mailto:p...@paulstewart.org>>
> To: af@afmug.com <mailto:af@afmug.com>
> Sent: Friday, July 10, 2015 5:26:55 AM
> Subject: Re: [AFMUG] Anyone heard of GTT
>
> Actually to be specific, GTT is a “Tier1” provider since they acquired TiNet.
> So usually a “blend of several networks” refers to a Tier2 provider .. GTT
> has *many* direct peers of significant size J
>
>
> Long time customer of the various companies that came part of the GTT
> “umbrella” – overall pretty happy although I’ve heard second hand about lots
> of “reorganization” problems .. haven’t seen much of it first hand though.
>
>
> 100 Gig very common now in most areas.. maybe there were the first to deploy
> in Saudi or something…
>
>
> From: Af [mailto:af-boun...@afmug.com <mailto:af-boun...@afmug.com>] On
> Behalf Of Justin Wilson - MTIN
> Sent: Thursday, July 9, 2015 9:16 PM
> To: af@afmug.com <mailto:af@afmug.com>
> Subject: Re: [AFMUG] Anyone heard of GTT
> We use them in Chicago. They provide a BGP blend of several networks. They
> are an international provider. One of their direct peers is China Telecom.
> I saw a press release they are doing 100 Gig in Saudi Arabia. If you want to
> know about our experiences with them (pretty good for the most part) hit me
> offlist.
> Justin
> ---Justin Wilson <j...@mtin.net <mailto:j...@mtin.net>>
> http://www.mtin.net
> <http://t.signauxdeux.com/e1t/c/5/f18dQhb0SmZ58dDMPbW2n0x6l2B9nMJW7sM9dn7dK_MMdBzM2-04?si=5679648505069568&pi=5135D234-DD8D-4602-8F2A-9491AF24D5F7&t=http%3A%2F%2Fwww%2Emtin%2Enet>
> Managed Services – xISP Solutions – Data Centers
> http://www.thebrotherswisp.com
> <http://t.signauxdeux.com/e1t/c/5/f18dQhb0SmZ58dDMPbW2n0x6l2B9nMJW7sM9dn7dK_MMdBzM2-04?si=5679648505069568&pi=5135D234-DD8D-4602-8F2A-9491AF24D5F7&t=http%3A%2F%2Fwww%2Ethebrotherswisp%2Ecom>
> Podcast about xISP topics
> http://www.midwest-ix.com
> <http://t.signauxdeux.com/e1t/c/5/f18dQhb0SmZ58dDMPbW2n0x6l2B9nMJW7sM9dn7dK_MMdBzM2-04?si=5679648505069568&pi=5135D234-DD8D-4602-8F2A-9491AF24D5F7&t=http%3A%2F%2Fwww%2Emidwest%2Dix%2Ecom>
> Peering – Transit – Internet Exchange
> On Jul 8, 2015, at 2:07 PM, Paul Stewart <p...@paulstewart.org
> <mailto:p...@paulstewart.org>> wrote:
> As in GTT – IP Transit provider?
>
>
> From: Af [mailto:af-boun...@afmug.com <mailto:af-boun...@afmug.com>] On
> Behalf Of Rory Conaway
> Sent: Wednesday, July 8, 2015 1:47 PM
> To: af@afmug.com <mailto:af@afmug.com>
> Subject: [AFMUG] Anyone heard of GTT
> I was told they are pulling out of Tucson.
> Rory Conaway • Triad Wireless • CEO
>
> 4226 S. 37th Street • Phoenix • AZ 85040
>
> 602-426-0542 <callto:602-426-0542>
> r...@triadwireless.net <mailto:r...@triadwireless.net>
> www.triadwireless.net
> <http://t.signauxdeux.com/e1t/c/5/f18dQhb0SmZ58dDMPbW2n0x6l2B9nMJW7sM9dn7dK_MMdBzM2-04?si=5679648505069568&pi=5135D234-DD8D-4602-8F2A-9491AF24D5F7&t=http%3A%2F%2Fwww%2Etriadwireless%2Enet%2F>
>
>
> “Nothing can bring you peace but yourself. Nothing can bring you peace but
> the triumph of principles.” – Ralph Waldo Emerson
>
>
>
>
>
>
>
>
>
>
