Brett writes:
MAE-Houston, a small NAP in the scheme of things, but it makes for a good example so we'll use it. $2000/month to get your foot in the door, then another large chunk of cash to connect to the Gigaswitch which all things considered, isn't really needed. Rather than waste their money on equipment that all in all just doesn't need to be there, why not make it more economic for local players to get involved and cross connect to eachother. In the end you not only save money by not bringing in useless hardware but you garner more customers by lessening the price of the private interconnect.
Hmmm. According to what I learnt in school, the cost of a connected network like a GIGAswitch or Catalyst or DELNI with N participants is: (N x interface_cost) + (N x port_cost) ...while the cost of a connected network made up of wire peers is: (2 x sum(N - 1) x interface_cost) "sum(N-1)" is an interesting function. Here are some examples: % calc > define sum(n) = n > 0 ? n + sum(n-1) : 0; "sum" defined > for (n = 2; n < 20; n++) print n,2*sum(n-1); 2 2 3 6 4 12 5 20 6 30 7 42 8 56 9 72 10 90 11 110 12 132 13 156 14 182 15 210 16 240 17 272 18 306 19 342 That means with 19 ISP's in a GIGAswitch-free room, there are 342 FIP's at a cost of, what, US$12000 each after discount? I'll betcha I can buy quite a few GIGAswitches for US$4.1M. Oops, that's not a fair comparison, since with a GIGAswitch I also need 19 FIP's. Figure that a fully configured GIGAswitch retails without discount for US$80K and that 19 FIPs are going to run another US$228K. That's still a *lot* less than 2*sum(n-1). This also assumes that we all have VIP2 cards and want to burn 9 7513 slots just on local peering, and it further assumes that a 7513 won't just simply melt if all the interfaces ever get hot at the same time. The breakeven is between N=3 and N=4. On the Internet, N never stays small. (And that breakeven assumes that the 4 people have to buy the whole GIGAswitch with noone like MFS to underwrite the costs of the unused ports; that means four people in a room together could SAVE MONEY buying the GIGA- switch.) Gah.