Max: 00:07 Hi. Max Clark. Let’s talk about real high speed Internet access for your office. I’m gonna figure out let’s see where to start with this one. Okay.
Max: 00:15 So you have a building and you wanna have a network connection to that building. You have to get a wire to that building. So maybe you do you can do wireless too. I’m not gonna get too technical with this, but you can do fixed wireless. You can do LTE.
Max: 00:24 You can do satellite. Yada yada yada. But let’s just say you want real fast stuff. You want 10 gig or a 100 gig service to your office. And or it could be a warehouse.
Max: 00:32 It could be a shipping and receiving facility. It could be I mean, building. You gotta you gotta building. You wanna have really fast Internet access in for what for for your purposes. And normally people buy Internet access from the phone company or the cable company or maybe a CLEC.
Max: 00:48 CLEC are competitive local exchange carriers. They’re basically they’re authorized by state PUCs to offer service so they they purchase from and resell from the phone company the cable company as well as constructing their own wire and putting their own infrastructure in the ground or on telephone poles the engineering brain is kind of firing off at me here for being not too specific and wrong sometimes Oh, we’ll keep going with it. So you have the line that comes into your location. You hear this referred to as the loop. Right?
Max: 01:14 The line that comes into your location, and then you have the service that gets overlaid on top of that line. So now you can go out. You can go to market, and you can buy you can get a 1 gig circuit right now for it’s one of these one of those, like, I’m old moments but you can get a 1 gig circuit for not a lot of money. As you start scaling up for 1 gig, you start talking about increments. 2 and a half gig, 5 gig, 10 gig circuit starts getting more expensive.
Max: 01:33 Now mind you in many cases the cost of the loop because that wire doesn’t act the fiber optic cable doesn’t change it’s that the equipment that changes and it’s a priceless we you want more speed so we can charge you more money kind of thing starts to kick in. As you scale up from 1 gig to 10 gig or from from 10 gig to then a 100 gig the cost of that circuit as Internet gets very expensive it’s very expensive to purchase high speed Internet connections over a certain rate that’s like that every enterprise buying it rate at your own location especially now you want diversity you need to have diverse entrances diverse medium diverse companies and by the way you can go and you can buy from the phone company or you can buy from 2 different c like aggregator kind of companies and think that you’ve redone and seen you don’t have redundancy That’s another video. Go look for it. So how do you do this? So one of my favorite tips and tricks with this one and one that we do with a lot of enterprises is what we used to do when I own a service provider.
Max: 02:26 And that is you find your closest carrier neutral data center facility. Carrier neutral is a perk. Doesn’t have to be carrier neutral. Find your closest data center to your location or locations. Get a minimal amount of data center space with them.
Max: 02:39 Co location. Quarter cabinet. 3rd of a cabinet. Half cabinet. Full cabinet.
Max: 02:43 Whatever. You get to do lots of other stuff with this space as well besides putting doing what I’m about to tell you. So size accordingly. But let’s just say you get a quarter cabinet, redundant power, and you can put put your routers and you can put some switches on there. What does this do for you?
Max: 02:54 Well, now you get the ability to purchase bandwidth at a rate massively less money than what it is cost delivered to your location. You get service from your location to the data center with a local loop. Now instead of buying IP transit, you buy IP transport. In the metro Ethernet forum world, instead of buying e line you buy e access you buy point to point circuit you buy switch ethernet you buy most by the way most of this is trade terms right you buy a point to point you buy some sort of connection between your location and your data center pop Now you have a point of presence in the data center you call it pop. Right?
Max: 03:28 So from your location to the data center, what’s cool about this is in the data center, you can purchase bandwidth on what’s called 95th percentile. So 90 5th percentile allows you to pay for bandwidth not based on your total speed that’s allocated to you but based on your actual consumption not in terms of consumption of of bytes transferred but consumption based on throughput at a steady state. Now what’s incredible about 95th percentile is if you’re in the data center business it starts off you get you get a sample every 5 minutes and at the end of the month the top 5th percentiles are removed. The next number is your what you get billed for. So if you take an average month you’re basically getting 30 hours of free I mean, so 30.41 hours of free traffic every month.
Max: 04:10 So what’s cool about that is if you have a and by the way, your your committed information rate, your CIR is usually 10% of the total port speed. So a 10 gig circuit has a CIR of 1 gig. Now we’re back to that number again, 1 gig. Right? Now here’s where this gets really fun is, you get 30 hours of free transfer.
Max: 04:26 So you could run 10 gig for 30 hours a month and then go back down to a gig and you’re still paying for 1 gig. For an enterprise with an with non 24 hour out, you know, operations, your office is only staffed for 20 days a month, 8 to 10 hours a day. So you’re already really low in terms of that total overall utilization. Maybe have prolonged operations. You’re running for 16, 18, 20 hours a day.
Max: 04:49 Same thing. You’re gonna find that when you actually start modeling out your traffic, what your what your 95th percentile equivalency would be, it’s way lower than you think it would be. So this is one of those oh, we’re we say we’re gonna need 10 gig. That’s great. You’re gonna have 10 gig because you’re getting circuits now that are 1 gig on 10 gig, and you can pay for the utilization.
Max: 05:05 So when we get into data centers, we start buying. Now you’re in a competitive purchasing environment to buy your bandwidth. You’re gonna be able to purchase bandwidth from any of the network carriers that are in that data center. And depending on your data center, what market you’re in, you could go from, like, maybe you’ve got a dozen to choose from to maybe a 500 to choose from. So big data center interconnection locations.
Max: 05:23 Right? Biggest one is 1 Wilshire in Los Angeles. So now it’s a core site. Owns the phones of owns the data center. 400 and some odd carriers.
Max: 05:30 11 Great Oaks in San Francisco. Weston Seattle Westin Building. 350 East CIR Mark in Chicago. 56 Marietta in Atlanta. 60 Hudson, New York.
Max: 05:38 1 Lemon eighth Avenue. Like like there’s aggregation points in every major city. And even if you’re in tier 2 facilities, you’re gonna tier 2 cities. I’m gonna say tier 2 markets are like, you’re in a location that has population under 5,000,000 people and no doesn’t have a football team. Right?
Max: 05:54 So even in those markets, you’re gonna find data centers and those data centers are gonna have diversity with different networks. So your architecture basically looks like so I’m just gonna use round numbers because it’ll make this a little bit easier to understand. These numbers are not correct. Don’t quote me on it. Don’t give me hate mail.
Max: 06:07 Don’t nasty comments. Just just go with me. If you’re buying a 10 gig circuit at your location, at your office, and that 10 gig circuit costs $10,000 a month, you’re gonna be able to buy a 10 gig transport between your office and your data center pop for probably $1500 a month. You’re gonna be able to co locate for probably a 1,000 to $1500 a month. Okay.
Max: 06:31 It depends how much size you need, how much power you need. Let’s just say $1,000 a month. You’re gonna have to pay cross connects. The the this all this kind of comes into this thing. And you’re gonna be able to go out.
Max: 06:39 You’re gonna buy IP transit. And depending on what network you’re gonna buy, you’re gonna be somewhere in the 70¢ per meg territory, let’s call it. Because you’re not buying you’re not buying 100 and 100 of gigs capacity. You’re you’re buying some self, you know, quantity of gigs, and you’re gonna probably buy a really expensive carrier and you’re gonna balance that off with a with a cheap carrier. So let’s just call it a 70¢ per meg average.
Max: 07:01 And you’re gonna buy 2 circuits. So 2 1 gigs. So you’re gonna have contracts. This is where this gets really fun for another $1500. So what are you out there?
Max: 07:10 You’re at $5,000 ish for redundant 10 gigs on burstable circuits. That’ll scale to 10 gig. With redundant 10 gig loops to loops to your office. You’ve cut your costs in half. You’ve gone from $10,000 a month for 1 circuit to $5,000 a month for 2 circuits.
Max: 07:26 Okay? So, again, scaling up. You want redundancy, 10,000, 10000, or 20,000. Now you can get the same thing for $5,000. Okay?
Max: 07:33 How do I know this works? Again, I did this. I owned a network service provider for 15 years. We did this all the time. Our core architecture as a service provider was just this.
Max: 07:42 We had data centers that we put equipment in, and then we took and we bought transport circuits out to where our customers were located, and then we sold them service. You can do the same thing yourself. Go ahead and do it. Now let’s say you scale up and you start pushing some crazy real traffic. So in today’s world, that that means you need a 100 gig circuits.
Max: 07:59 The same thing applies. Instead of going out, we’re doing 100 gig metros right now. Depending on the metro, you’re call $3,000, $4,000 for a 100 gig metro ring. Right? It’s crazy.
Max: 08:09 And it’s crazy because I’m old and I remember, like, these things at scale. But let’s just call it 3 to $4,000 for a metro ring for a 100 gig. And now you go to your data center again and you go to your your carriers, your transit providers and you’re buying 10 gig on a 100 gig circuits same math your commitment ratio usually 10% of the port speed you’re gonna pay even less per megabit because of the quantity that you’re purchasing has gone up so much now right so every time you’ve gone up your margins has gone up so much now. Right? So every time you’ve gone up, you margins basic basic stuff here.
Max: 08:35 And your cost per meg has just dropped. And now you’ve got redundant 100 gig circuits. And then maybe for some reason, you need 400 gig. Go out and get 400 gig. Right?
Max: 08:45 So 400 gigs on the market today. 800 gigs coming pretty quickly. And then on a year or 2 is even something even faster is coming down the pipe. The thing that’s amazing about this is you’re not paying the premium to have the bandwidth increment brought to your office. You’re paying a metro network connection.
Max: 09:04 You’re co locating a data center at a pop. You’re establishing your your transit there and you’re going out and and you’re doing you’re you’re getting a very it’s smoking fast Internet connection for pennies on the dollar compared to the alternatives. Cable companies won’t sell this to you. They won’t tell you it exists. So your average average I mean, this isn’t this just is what they sell.
Max: 09:22 Right? Like, they’re not in solutions engineering to try to build these solutions for you because they they wanna sell you the circuit. And if you haven’t done it before like why would this exists but if you’re in a major market if you’re on a secondary market you can build this kind of solution for your enterprise and if you need and want real like much faster bandwidth than what you would get normally by calling the phone company or the cable company or an aggregator reseller to see like whatever they are near you this is how you do it and this is how you do it in the cheapest way possible I’m max Clark I hope this helps you if you have any questions, drop a comment below.
