[190223] in North American Network Operators' Group
Re: cross connects and their pound of flesh
daemon@ATHENA.MIT.EDU (Patrick W. Gilmore)
Sun Jun 19 11:30:09 2016
X-Original-To: nanog@nanog.org
From: "Patrick W. Gilmore" <patrick@ianai.net>
In-Reply-To: <CAJL_ZMOpMara9u+AH8qv3Zn1GAXpiaEUgv4s3eMtS7wBBeqo5w@mail.gmail.com>
Date: Sun, 19 Jun 2016 11:30:02 -0400
To: Jim Deleskie <deleskie@gmail.com>
Cc: NANOG list <nanog@nanog.org>
Errors-To: nanog-bounces@nanog.org
Actually, back in the T1/T3 days, colos frequently asked what you ran on =
the cable and then charged you based on the capacity of the circuit - =
even when it was the same exact cable. Of course, none of us would ever =
ask for T1 xconn then run ethernet over it.
Colo providers are absolutely worried about drops in xconn revenue. Look =
at some large colo providers who are public and split out their numbers. =
You=E2=80=99ll see that the percentage of their profit from xconns is =
usually more than double the percentage of their revenue from xconns. =
Put another way, if xconn revenue drops by 10%, their profit drops by =
over 20%. How many public companies can shrug off a 20% drop in EPS? I =
submit: Not very many.
This is not surprising. When you build your business on the ignorance of =
your customers, you are in a world of hurt once your customers learn =
even a little bit more.
--=20
TTFN,
patrick
> On Jun 19, 2016, at 10:13 AM, jim deleskie <deleskie@gmail.com> wrote:
>=20
> I don't buy this. They sold you one cable before, they sell you cable =
now.
> Little difference then we moved customers from a T1 to T3 back in =
the
> 90's. If Colo's can't understand more then 20+ yrs of evolution its =
hardly
> right to blame it on the market.
>=20
>=20
> -jim
> Mimir Networks
> www.mimirnetworks.com
>=20
>=20
> On Sun, Jun 19, 2016 at 11:07 AM, Mike Hammett <nanog@ics-il.net> =
wrote:
>=20
>> Before 100G, you'd need ten cross connects to move 100G. Now you'd =
need
>> only one. That's a big drop in revenue.
>>=20
>>=20
>>=20
>>=20
>> -----
>> Mike Hammett
>> Intelligent Computing Solutions
>> http://www.ics-il.com
>>=20
>>=20
>>=20
>> Midwest Internet Exchange
>> http://www.midwest-ix.com
>>=20
>>=20
>> ----- Original Message -----
>>=20
>> From: "Brandon Butterworth" <brandon@rd.bbc.co.uk>
>> To: bross@pobox.com, dave@temk.in
>> Cc: nanog@nanog.org
>> Sent: Sunday, June 19, 2016 8:55:57 AM
>> Subject: Re: cross connects and their pound of flesh
>>=20
>> Dave Temkin <dave@temk.in> wrote:
>>> And as colo operators get freaked out over margin compression on the
>>> impending 10->100G conversion (which is happening exponentially =
faster
>> than
>>> 100->1G & 1G->10G) they'll need to move those levers of spend around
>>> regardless.
>>=20
>> If they've based their model on extracting profit proportional
>> to technology speed then they've misunderstood Moore's law
>>=20
>> brandon
>>=20
>>=20
