CENX Joins Ethernet Exchange Party

November 4th, 2009 by · 1 Comment

Yesterday, the head of the Metro Ethernet Forum, Nan Chen, unveiled the Carrier Ethernet Neutral Exchange (CENX).  The startup, which has been under development for 5 years, aims to do the same thing as what Equinix is trying to do, i.e. serve as a neutral point of contact between the Ethernet services of multiple carriers.  Unlike that of Equinix, CENX’s service is already up and running in New York, Los Angeles, and Chicago.  One day it’s a vacant lot, the next day there’s a party going on.

It’s not really clear to me whether Equinix or CENX has the upper hand here, or even if there is an upper hand to have just yet.  Equinix’s advantages are:  1) it doesn’t need this, 2) they have a nice set of carriers on board, and 3) if the concept works then it will feed both new revenues and existing services like colocation and further differentiate them from other data center providers.  Equinix’s main disadvantage is the same as its first advantage – it doesn’t need this, and hence the urgency may not drive them as hard.

CENX’s advantages are:  1) they are operational now, and 2) Nan Chen’s MEF credentials gives him additional neutral mojo.  Their main disadvantage is the opposite of Equinix’s – they need this, it’s their only business.  So if it takes too long for the market to develop of they have misjudged the economics, then there’s nothing more to do.  Such is the life of any startup of course.

But I don’t think it’s one or the other.  The speed with which we have seen two ethernet exchanges hit the news leads me to believe that there are more out there.  The key for now is whether or not this sort of thing is a viable business.

Categories: Datacenter · Internet Traffic

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  • Anonymous says:

    The problem with CENX is they don’t have any proven talent with experience executing in service provider/carrier space. Their 3rd founder, a long time industry veteran, is no longer with them. He built their technical operations and deployed the CENX network infrastructure in all 3 markets. What remains of the leadership team is a group of bright people with theoretical knowledge, strong marketing skills and no hands on experience. It should prove interesting.

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