An Internet exchange point (IXP) is nothing but a physical location through which Internet infrastructure companies like Internet Service Providers (ISPs) and CDNs connect. Network providers can share transit outside of their network thanks to these places that are situated on the "edge" of many networks. Companies that are present inside an IXP can minimise their path to transit coming from other participating networks, reducing latency, improving round-trip time, and perhaps lowering expenses.

Let’s understand more about Internet Exchange Services.

How Do IXPs works? 

An IXP's basic structure consists of one or more physical sites with network switches that direct traffic between the member networks. These networks distribute the maintenance expenses for the underlying physical infrastructure and related services with a wide range of techniques. When traffic is transported over several networks, those networks occasionally charge money for the delivery, much to how expenses are incurred when moving cargo via third-party sites. Member organisations link to one another via IXP to lower expenses and decrease latency and avoid the charges associated with transmitting their data over a third-party network.

Network interconnections have significantly boosted during the past two decades, concurrently with the massive growth of the worldwide Internet. The development of additional data centre facilities to house network equipment is part of this growth. Due in large part to the robust Internet exchange points that run within them, several of those data centres have drawn enormous numbers of networks.

Importance of Internet Exchange Points

Without Internet Exchange Services, traffic moving from one network to another might be routed through an intermediate network to reach its destination. They are referred to as transit providers. In some situations, there is no issue with doing this because that is how a significant amount of international Internet traffic moves. After all, it would be prohibitively expensive to maintain direct connections to every ISP in the globe. 

Nevertheless, depending on a backbone ISP to transport local traffic might be detrimental to performance, often as a result of the backbone carrier delivering data to another network in a whole other location.

In the worst-case scenario, traffic from one city intended for another ISP within the same city may travel great distances to be swapped and then return. This condition has the potential to cause trombones. The benefit of a CDN with IXP presence is that it may optimise the path data takes inside its network, decreasing the number of wasteful pathways.

How do service providers distribute traffic among many networks?

Transit

An agreement between a client and its upstream supplier. A transit provider offers complete Internet access to all of its users. The use of transit is a paid service. Customers' IP addresses can be notified to the transit provider and subsequently to the rest of the global Internet via the BGP protocol.

Peering

Internet Exchange Peering is a system that allows networks to exchange IP addresses directly without the use of a middleman. The majority of the time, data transport between member networks at Internet exchange points is free. Settlement-free peering is a connection that allows free traffic to flow from one network to another.

Understand peering vs paid transit

Furthermore, certain networks incur expenses while sending data. Large networks, for instance, are more likely to peer with other large networks if their market shares are similar, although they could charge smaller networks for the peering service. A member firm may have many agreements with numerous distinct members inside a single IXP. In situations like this, a business may design its routing protocols using the BGP protocol to ensure that they are optimised for lower costs or lower latency.