Tactic 4. Buy-In Key Players
If the promise of peering value is not sufficient to attract key peers (those with name recognition, unique routes, “Open” Peering Inclinations, large volumes of traffic available for peering, etc.), added incentives can be used to bring these select players in (Figure 13-5).
For example, in 1999 Equinix issued warrants for stock to WorldCom to help offset the cost of and expedite the building in transport and transit capabilities (see public debt filings for details). The rationale was that WorldCom could then participate in the upside as the stock appreciated as a result (in part) of WorldCom’s participation.
Value of the IXP = f(p, r, v, m) - c
p: The population
r: The routes available
v: The volume of traffic exchanged
m: The market perception of the IXP
c: The cost of participatioon at the IXP
When considering this option, one needs to calculate the cost to “buy in” participants and estimate the value of their participation. Will they provide credibility? Will they peer openly? Will they allow their name to be used to draw a peering crowd? Also, one must manage the perception of their peers – the peers that may otherwise believe that they too should partake in the upside from their participation. Finally, one needs to consider how long the IXP can wait to pull these players in by natural organic forces.
Note that this tactic is not generally seen in Europe or other places the European IXP model is used. In that model, the ISPs “own” the IXP and are unlikely to enthusiastically approve providing the asymmetric benefits to their competitors, regardless of the value they bring to the IXP.
Figure 13-5. Buy In Key Players.