1. Peering raises your revenue
If you are an ISP or carrier, you typically have some, or many, BGP downstream customers behind your ASN. These customers typically have more than one upstream on their edge, and this means you are in competition with others in terms of delivery of the most traffic in order to get the most
revenue from this customer.
If not steered manually by the customer, there is exactly one reason that decides who delivers the most traffic to the customer: the logic of BGP. The network who can deliver the shortest AS paths to most, or the most used prefixes, wins the largest amount of traffic.
Peering helps you to shorten the AS paths to other networks compared to classical IP transit – where it can happen that our target network is an AS, is behind an AS, behind that AS, behind the next AS, …, behind your IP transit upstream. With peering you can get direct or closer routes to interesting (high volume) networks.
2. Peering decreases your costs
Peering is the better alternative to transit as you have more control and better quality. In many cases all over the world, the cost of traffic via a peering exchange is also cheaper. Exceptions are possible depending on the region of purchase and on the volume of usage of peering and transit ports. But beyond the cost discussion, peered IP traffic has in any case the better quality level and gives you all the benefits that are described in this paper.
3. Peering lowers the latency
Internet quality is all about latency, packet loss ratio, and throughput. Having shortcuts to everything which is close by is mission critical.
Latency is one of the most important factors on IP networks in terms of stability and applications like VPN, MPLS, gaming, terminal server usage, voice connections, VoIP connections, DNS, HTTP, streaming and many others.
With transit, in most cases you have an unknown, unpredictable, non-transparent path along which your data flows. With peering, you get in control over where your network exchanges IP with other important networks. You control where to handover the traffic (which city / which IX) and you have control over your backhaul and the peering port usage. As the other network is also in control, it means that together with your peering partner and the IX team, you have a controlled end-to-end handling of your valuable traffic streams.