Peering vs. Software-Defined Interconnection

Ensuring the best results across all workloads requires a hybrid approach to networking

Tom Yin
Tobias Schaub
Peering vs. Software-Defined Interconnection

To increase business agility and accelerate revenue growth, enterprises around the world are pursuing digital transformation. A successful digital transformation initiative requires enterprises to maximize the value of their data by moving it freely across an ecosystem of partners, enabling shared insights and co-innovation. The Gartner® report “Top 2022 Tech Provider Trend: Co-Innovation Ecosystems Will Boost Transformational Growth” highlights this as an imperative for business success:

“In the expanding digital economy, business value is created or enhanced through various digital technologies and data. Considering that digital ideas, services or data flow easily across different boundaries of enterprises, industries or countries, co-innovation presents a larger opportunity than before. In a new digital world, there are empowered customers, digital disruptors, agile startups and significant tech investments, so many technology providers acting alone will struggle to keep up with the pace of innovation.”[1]

The need for quick and easy data sharing across partner ecosystems may be clear, but the question of how best to do it isn’t so straightforward. Enterprises have a variety of networking methodologies available to them, and which one they choose for a specific use case will depend on the exact nature and volume of the data being moved. In this blog, we will look at two main options enterprises have for data transfer: peering and private interconnection.

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What is peering?

Peering takes place any time two organizations transport data between themselves using a connection based on the public internet. Most peering relationships start with basic IP transit (not requiring RFC1918-to-RFC1918 private connectivity), which is by far the quickest and easiest way for two organizations to exchange data. However, it also comes with reliability and efficiency drawbacks. This is why although the vast majority of peering partnerships initially take place over IP transit, the total volume of data moving among all those partners is quite small.

As enterprises start to exchange more traffic with specific peering partners, they can get better results for those high-volume partnerships by progressing them via an intermediary into an internet exchange or via direct connection through a dedicated cross connect. These more advanced peering methods are also built on top of the internet, which means they are still inherently public connections.

What is private interconnection?

In contrast, interconnection is a direct, private connection between two parties running over a purpose-built Layer 2 link (providing RFC1918-to-RFC1918 private connectivity). In the past, private interconnection was traditionally established via physical cross connects, which meant both parties needed to maintain these dedicated physical connections in the same location—the driving force behind colocation. The need for colocation created added costs and complexity, which meant that private interconnection was not practical for all use cases. In addition, these physical connections lack the flexibility to easily scale capacity up and down on demand. For this reason, interconnection via cross connect is generally not cost-effective for low-bandwidth use cases; you’ll inevitably end up paying to use an entire port on your infrastructure when you only need a portion of the capacity it can support.

Equinix Fabric™ enables software-defined interconnection, a new approach that helps address some of these shortcomings. Software-defined interconnection can take place remotely, meaning two partners can take advantage of interconnection without having to be colocated. In addition, while cross connects require monopolizing an entire port for each connection, software-defined interconnection gives you the option of aggregating multiple virtual connections on a single port. In short, Equinix Fabric helps cut costs and complexity, making private interconnection viable for a much wider range of use cases.

Private interconnection has security benefits, which may not be necessary for all use cases

As you might expect, public connections tend to create a much wider attack surface for cybercriminals. However, valuable enterprise data can also be exposed in much more mundane ways. Employees or contractors that pass through a traditional two-factor authentication process may be able to exploit their trusted user status to gain unauthorized access to data that has nothing to do with their job roles.

A zero-trust security architecture can help address this issue by setting access checkpoints at every step of the user journey, as well as applying behavioral surveillance to check for potential signs of unauthorized user behavior. For vulnerable data that would benefit from a zero-trust architecture, you’d be best served to choose private interconnection; doing zero trust over a public connection is technically possible, but much more difficult.

It’s also important to remember there are clear tradeoffs involved with a zero-trust security architecture. For instance, the additional user access checkpoints can be time-consuming and negatively impact the user experience. For some use cases, this extra level of security simply won’t be worth the drawbacks. In turn, this means you may not get as much value from running those use cases on private interconnection.

Other factors to consider when weighing network connectivity options

From a regulatory perspective, private interconnection can be helpful because it allows you to design your network from the ground up with built-in compliance controls. Again, this extra level of control can be helpful for certain use cases, but excessive for others.

Reliability is another key factor to consider. When you exchange data over the internet, you’re sharing a connection with people streaming video content, posting on social media, and everything else people use the internet for. There’s no way to reliably ensure your data will get from its origin to its destination in a set period of time, because your traffic won’t be prioritized over anyone else’s.

With private interconnection, the connection is yours to design how you see fit, so you’ll always be able to ensure the right data gets moved at the right time. As a result, private interconnection is a particularly good choice for workloads that involve moving very large volumes of data on a predictable timeline, such as financial use cases.

Finally, private interconnection gives you much more control over latency. Data moving over a public connection may not always follow your desired route from origin to destination, meaning that latency levels will be harder to predict. With private interconnection, you can ensure your data paths are optimized to help keep the distance traveled as short as possible. This can unlock the full value of latency-sensitive digital technologies such as artificial intelligence and machine learning (AI/ML).

Equinix offers the networking variety today’s enterprises need

So, which option is best to support the data-sharing needs of your digital transformation initiative? The simple answer is “it depends.” You must strike the right balance between what’s technically feasible and what’s commercially viable, and do so for a wide variety of use cases with their own specific considerations. An enterprise that properly considers all applicable factors will most likely end up using a combination of peering and private interconnection methodologies.

Equinix offers an unmatched level of networking variety to help meet the unique needs of your organization. In addition to Equinix Fabric for software-defined interconnection, this could include:

  • Equinix Internet Access for IP transit.
  • Equinix Internet Exchange® for public peering.
  • Equinix Cross Connects for dedicated connectivity.
  • Network Edge for virtual network functions (VNFs) from leading router, firewall and SD-WAN providers, helping you architect your digital networking infrastructure in minutes at major metros across the world.
  • Additional networking options provided by our ecosystem of thousands of service provider partners.

To learn more about how Equinix can help you deploy a digital infrastructure that addresses challenges and drives competitive advantage, read the digital leaders ebook today.


[1] Gartner, “Top 2022 Tech Provider Trend: Co-Innovation Ecosystems Will Boost Transformational Growth”. Annette Jump, David Adams. February 2022. ID G00761166. GARTNER is a registered trademark and service mark of Gartner, Inc. and/or its affiliates in the U.S. and internationally and is used herein with permission. All rights reserved.

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Tom Yin Former Business Development Director
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Tobias Schaub Principal Solution Marketing Manager
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