cross connects and their pound of flesh

Sun Jun 19 13:19:16 UTC 2016

On Sat, Jun 18, 2016 at 12:54 PM, Brandon Ross <bross at pobox.com> wrote:
>
>
>  Value based pricing is all the rage these days, which is why they charge
> you so much for cross connects.

Exactly. Not that I don't like free cross connects (they're the bees knees,
in fact), but at the end of the day, an existing colo operator is not going
to go from paid->free cross connects without extracting that pound of flesh
(read: sweet sweet 100% pure margin) from somewhere else. Your space and/or
power prices will go up to backfill that lost profit. That said, those of
us that buy a decent amount of colo prefer to trade in the value of the
asset leased/purchased - space & power - as we have real world indexes to
tie the underlying cost to for negotiation purposes.

And as colo operators get freaked out over margin compression on the
impending 10->100G conversion (which is happening exponentially faster than
100->1G & 1G->10G) they'll need to move those levers of spend around
regardless.

-Dave