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Developing a Peering Strategy: Aligning Business Goals with Interconnection

What is a Peering Strategy?​

At its core, a peering strategy is how your network decides who to connect with, where, and on what terms. It's not just a technical choice, it's a business decision that impacts cost, performance, resilience, and customer satisfaction.

Analogy: Think of peering like building a trade network between cities. You could:

  • Buy access to global trade routes (transit).
  • Set up direct trade agreements with neighboring cities (peering).
  • Or join a bustling marketplace (IX) where everyone exchanges goods efficiently.

Your strategy is deciding how much you rely on each model, based on what benefits your community the most.

Why Peering Strategy Matters​

  • Cost Control: transit bills can spiral as traffic grows; peering reduces dependency.
  • Performance: direct interconnections cut latency, improving user experience.
  • Negotiation Power: a clear strategy lets you engage peers on equal terms.
  • Market Positioning: peering choices can strengthen your brand - e.g., "we're directly connected to Netflix, Google, and the cloud."
  • Resilience: diverse peering reduces the risk of outages or bottlenecks.

Types of Peering Relationships​

Open Peering​

  • Definition: you accept peering with almost anyone at an IX.
  • Analogy: like saying, "our marketplace stall is open to trade with anyone who shows up."
  • Benefits: quick growth, easy access to many networks.
  • Trade-offs: you may end up with peers that don't deliver much value.

Selective Peering​

  • Definition: you set criteria (traffic volume, geographic relevance, business value) before agreeing to peer.
  • Analogy: carefully choosing business partners, quality over quantity.
  • Benefits: ensures resources go to meaningful relationships.
  • Trade-offs: can slow down expansion, and smaller networks may be excluded.

Restrictive Peering​

  • Definition: you peer only under special circumstances.
  • Analogy: an exclusive members-only club.
  • Benefits: very high control over who connects.
  • Trade-offs: risk of higher costs (more transit) and fewer routes.

Aligning Strategy with Business Goals​

1. Growth Stage​

  • Small ISPs or startups often start with transit for simplicity.
  • As traffic grows, they add peering at IXs to cut costs and improve performance.

2. Content Providers & CDNs​

  • Peering is essential. The goal is to be "as close to eyeballs as possible."
  • Strategy: open peering at many IXs + selective private peering with big ISPs.

3. Enterprise Networks​

  • Often focus on cloud interconnection rather than peering widely.
  • Strategy: connect where it supports business apps (e.g., Office365, AWS).

4. Large ISPs / Tier-1s​

  • More restrictive, because they don't want to devalue their transit business.
  • Strategy: peer selectively, sell transit aggressively.

Historical Context​

  • 1990s: peering was informal and often handshake-based, "we'll exchange traffic at this meet-me room."
  • 2000s: IXs professionalized the process, and peering policies became more formal.
  • Today: most networks publish peering policies on PeeringDB, making strategy more transparent. Business development teams now treat interconnection as a competitive advantage.

Key Tools in Peering Strategy​

  • PeeringDB: the industry directory for finding peers, IXs, and connection details.
  • Traffic Analysis: knowing your top destinations guides which peers matter most.
  • Business Intelligence: align interconnection with customer needs (e.g., gaming traffic, cloud apps, video streaming).
  • Relationship Building: peering often starts with conversations at industry forums (APRICOT, NANOG, LACPIF, AfPIF, GPF).

Best Practices​

  • Know Your Goals – is it cost reduction, latency improvement, or market expansion?
  • Balance Transit and Peering – most networks need both.
  • Review Regularly – traffic patterns shift; re-evaluate peers yearly.
  • Invest in Visibility – use monitoring to prove the business value (latency drops, cost savings).
  • Think Beyond Traffic – sometimes a peer is valuable because of marketing or partnership, not just Mbps.

Beginner's Takeaway​

  • Peering strategy = business strategy.
  • Open, selective, or restrictive peering reflect how you want to position your network.
  • Aligning with business goals ensures interconnection decisions support cost savings, performance, and growth.
  • Peering is not just about where packets go, it's about where your business is headed.

✨ The most successful networks treat interconnection not just as plumbing, but as part of their competitive edge.