Digital Realty Declares War On US Internet Exchange Market

August 22nd, 2013 by · 1 Comment

Taking another step beyond mere colo real estate development, Digital Realty Trust (NYSE:DLR, news, filings) this morning unveiled an ambitious new internet peering environment. Their Digital Open Internet Exchange aims to bring the 'more independent and cost-effective exchange options' one generally finds in Europe to the US market.

If there was any doubt about their intentions when it comes to taking on the market, here's Digital Realty's John Sarkis, VP of Connectivity and Carrier Options taking aim at pricing:

We understand that the costs and limitations associated with connecting to the existing Internet exchanges in the U.S., as well as peer-to-peer interconnecting, are simply too high.

They'll be providing the infrastructure behind a neutral and member-governed exchange, while operating as an 'endorsed data center partner'.

Digital Realty certainly has the footprint to make a play at a truly global internet exchange fabric, with some 120+ properties in 32 markets around the world containing some 23.7M square feet.  Note that just a few days ago they did a deal with Epsilon over in London for a distributed cloud datacenter connectivity platform, which is certainly a related piece of the puzzle.

As Equinix moves toward becoming a REIT, it is interesting to watch the REITs like Digital Realty and CoreSite working hard to build ecosystems that make them look more and more like, well, Equinix. The business models haven't converged entirely yet of course, but there is definitely a pattern to the flow.

The initial roll out of Digital Realty's new exchange will be on the east coast within the New York and Northern Virginia datacenter markets, with others soon to follow.  Of course the success of a community driven exchange like this depends on a critical mass of networks hooking up, so we'll have to watch how quickly things scale.

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Categories: Datacenter · Internet Backbones · Internet Traffic

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