Today, we have all come to expect every one of our online interactions to happen practically instantaneously, whenever we want it to. To make fast, seamless online experiences possible 24 hours a day, we depend on a global network filled with complex, interdependent technologies. One of the most important of these technologies – and one that is largely an “unsung hero” –  is the humble internet exchange point (IXP). 

In this article, we’ll take a look at what an internet exchange point is, and how they work. We’ll also look at the impact IXPs can have on performance and resiliency, and what IT leaders should consider when creating and deploying a global connectivity strategy.

Network performance and reliability is more important than ever

In our modern business world, application performance and page load speed directly impact profitability. 70% of consumers surveyed by Unbounce said that site speed directly influenced their willingness to buy something. A report by Atlassian found that network and infrastructure outages cost businesses an average of $9,000 per minute. Having a network and infrastructure strategy that delivers high speed and availability is more critical to business success than ever before.

Managing the networks connecting these apps, products, and services to the world is not easy. An evolving and increasing threat landscape, growing numbers of remote workers, and budget constraints from market uncertainty has made things even more difficult in recent years. To keep up, IT leaders need to leverage every tool at their disposal. One way modern IT teams can improve network resiliency, performance, and help keep costs under control is by peering with internet exchange points (IXPs).

What is an internet exchange point (IXP)?

An internet exchange point (IXP) is a physical location where different Internet Service Providers (ISPs), content delivery networks (CDNs), and network operators connect their networks together to exchange internet traffic. IXPs are often inside data centers (also known as carrier hotels) that serve as the major network hub in their region.

Internet exchange points are also known as Network Access Points (NAPs) or shortened to just internet exchanges or IXes. They are located at the “edge” of all the different internet networks in the physical location. 

When a provider directly connects to other networks in a local IX, they “shorten” the distance between their own network and other local participating networks. This enables a provider to reach a local market with less latency, and often, reduced costs as well. Local internet traffic can also reach the provider’s network faster, improving the user experience of those located in that region.

How do internet exchange points work?

In the simplest terms, IXPs are like your own basic home or office network, but on a massive scale. One of the largest internet exchanges is DE-CIX in Frankfurt, Germany. Founded in 1995, DE-CIX now has over 3,000 member networks and 110 pots, and averages nearly 9.72 terabits per second of data transfer across its vast exchange. At this scale, it is easy to see how fundamental these large, globally distributed IXPs are to our modern internet infrastructure. 

To get a bit more technical, an IXP is a local-area network (LAN) that operates at Layer 2 of the OSI network model. This enormous LAN is created by interconnecting network switches across numerous data centers. If you visited an IXP location to see the physical infrastructure in person, you’d see rooms and rooms of cabinets filled with servers and network switches. These network switches route the traffic coming in from all the member networks. 

The protocol that each network uses to exchange their routing information is known as the “Border Gateway Protocol” or BGP. Most networks in an IXP use BGP to “talk” to each other, allowing them to control the flow of traffic and make routing decisions. 

ISPs and other network operators connect to IXPs through high-speed optical fiber connections. At each exchange point, these providers establish what is called a peering relationship. When two networks peer with one other, they mutually benefit from increased speed and reliability. You can check out the video below to learn more about how internet exchanges work.

What are the benefits to connecting to an internet exchange?

When providers directly connect to exchange network traffic in an IXP, they don’t have to send their requests through as many intermediary networks to get to and from each end user. Every participating network gets access to more potential routes for their traffic, giving everyone involved better overall performance and improved resilience.

When an organization’s network needs to reach end users spread across countries and continents, connecting to internet exchanges should be a key part of the overall network strategy. Internet exchange connections can be especially useful for content delivery networks, cloud and infrastructure providers, enterprises with large employee bases, government and educational institutions, security providers, and even startups that are experiencing hypergrowth. 

By connecting with internet exchanges, IT leaders can improve their networks in many ways, including:

Lower Latency and Better Application Performance

When networks directly peer with one another, data travels much more efficiently. An internet exchange gives your data more paths it can travel, especially in and around the area it is located. This helps every request reach local end users much faster. When data travels the shortest path available,  it dramatically reduces latency, ensuring a faster and more seamless user experience. (Latency refers to the delay between someone sending a request with their device and receiving a response from a server on the internet.)

Improved Network Resiliency and Redundancy

Simply put, the more IXPs you connect to, the larger your network gets, and the more resilient and redundant it becomes. If your online application or service gets impacted by an outage or other type of failure, your data can still get to your customers via the alternative paths each IXP makes available to you. With network uptime now directly tied to business profitability, and slow performance and outages more disruptive than ever, IXPs can provide your network a boost to resiliency that will minimize downtime.

Cost Efficiency

When a network directly exchanges traffic at an IXP, organizations can often reduce their transit costs. Large Internet Service Providers (ISPs) and other very large networks often use settlement free interconnection. In this arrangement, neither party pays the other for the exchange of traffic because the benefits are mutually equitable.

For smaller networks, IXPs often require your business to become a member and pay for the port. In these cases, networks with the highest traffic and usage get the most benefit due to the flat rate pricing. For example, sending 10 gbps of data over a carrier at 25 cents per megabit could easily add up to $2,500 per month. In contrast, a 10g port at an internet exchange might only be $400 per month.

Faster, Easier Global Reach

Nearly every major global market in the world hosts a facility with an IXP. For companies that need to scale globally and target international markets, connecting to global IXPs can grow a network quickly without major infrastructure investments. Global IXPs give organizations a way to quickly establish a presence in a new market and boost their connectivity to local end users.

Rapid Scalability without Major Infrastructure Costs

IXPs can help organizations scale their bandwidth, reach, and network capacity without large initial investments in infrastructure. As soon as a network starts exchanging traffic directly at an IXP, they can take advantage of higher bandwidth capacities right away.

Enhanced Security and Easier Data Privacy Compliance

Peering at an IXP reduces the number of intermediate networks that an organization’s data must go through to get to the end user. This gives attackers fewer chances to hijack or redirect the request. IXPs also often share threat intelligence and best practices among all their peering partners. To meet requirements for data sovereignty and privacy, connecting to local IXPs can keep customer data inside a specific region.


Today’s ever-increasing landscape of online applications and services puts a lot of pressure on IT teams. Our “new normal” of fast, reliable, and seamless connectivity for everything online means that high performance and availability is a must – even if end users are distributed throughout the world. 

For modern businesses, slow performance often means loss of revenue, productivity, and much more. In this environment, IT decision-makers must effectively balance network cost, reliability, and performance, often while scaling rapidly to reach new markets. 

To overcome these challenges, IT leaders operating global networks should strongly consider peering with IXPs. IXP peering can reduce latency, help reach local markets faster and more directly. If your team can leverage IXPs effectively, your organization can improve global reach, performance, and resiliency while lowering your overall connectivity costs.

To take a close look at your network traffic, and see where you can optimize your strategy to reduce latency and cost, schedule a call with a network engineer at NetActuate. Our team operates and optimizes one of the largest global networks in the world by number of peers. We can help you leverage peering, direct connections, and more, to help make your network faster, more efficient, and more reliable.

You can also leverage our remote peering partnerships with the Amsterdam Internet Exchange (AMS-IX) or the New York Internet Exchange (NYIIX).