As enterprises move toward the use of cloud-based applications, enterprise network engineers need to be familiar with the best solutions for integrating their networks into the cloud to provide the highest performance at the most effective price.

Cloud exchanges, also known as peering exchanges, are network hubs that have high speed, low latency connections into multiple cloud providers.  Ideally these peering exchanges allow the customer to reduce their dependencies on traditional Internet connectivity to provide better performance and increased security.

Direct peering, on the otherhand, involves a peering relationship with a single cloud provider.

Alternatives to these two solutions are the use of traditional Internet access to the cloud provider, to connect to the cloud provider by a direct (non-peered) link or VPN interconnect. 

Network Peering Options for Cloud Based Computing

Customers can extend their enterprise network into the cloud exchange by placing network resources into a cage or cabinet, usually at colocation facility or ”carrier hotel.”  The cloud exchanges provide direct “on-network” access to various cloud providers at what is usually referred to as an edge network Point-of-Presence (PoP).  Cloud exchanges offer high speed, low latency connections directly into the networks of the multiple cloud providers.

Direct peering is usually done logically via the exchanges of Border Gateway Protocol (BGP) routes between cloud providers and enterprise networks. The physical connectivity is handled by high-speed fiber cross connects within the co-location facility.

Disadvantages of Traditional Approaches

The disadvantage of the traditional Internet as a transport for enterprise to cloud service traffic is the lack of Quality of Service (QoS) options for traffic prioritization and expedition. There are no guaranteed SLAs for latency over the native Internet to cloud providers and this could lead to variances, unpredictability and unacceptable performance depending on the applications be hosted “in the cloud”.

Network Peering with Cloud Providers

Google, Microsoft, IBM and Amazon allow direct peering between their networks and enterprise networks. With this type of connection the enterprise will be able to exchange Internet traffic between their network and provider’s network at specific, co-located edge network locations. Google now says it offers such direct links in 70 Points-of-Presence in 33 countries. Similar offerings are now available from other cloud service providers such as Amazon, Microsoft and IBM.

Cloud Exchanges, such as CoreSite and Equinix provide peering exchanges, but do not themselves offer cloud services. They offer direct, high-performance connections to multiple cloud service providers, generally with specialized offerings for each cloud provider. For example, CoreSite offers “AWS Direct Connect” and Equinix“Cloud Exchange” offers direct connectivity to Google, Azure and AWS cloud services.

Network Peering Costs

Whether peering with a cloud exchange or directly with a cloud provider, costs will be based on factors such as:

  • Bandwidth speed, scalability, burstability, etc.
  • Number of routes supported
  • Inter-regional traffic requirements.


Making use of direct peering or cloud exchanges is recommended over standard Internet connectivity to cloud service providers. When planning a solution for peering with cloud service providers, customers should look to cloud exchanges, if their enterprise makes use of multiple cloud providers. If, on the other hand, all of their applications are hosted by a single cloud services provider, it makes sense to explore the direct peering options with their chosen cloud provider. Careful planning must be undertaken to define network traffic levels and related routing issues so that costs can be negotiated effectively and accurately.

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Source: Sky Chat IT Blog


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