How Edge Data Center Providers are Changing the Internet’s Geography

As people watch more and more of their video online versus cable TV or satellite services, and as businesses consume more and more cloud services versus buying hardware boxes and software licenses, the physical nature of internet infrastructure is changing. Whether your drug is Bloodline on Netflix or Duck Dynasty on Amazon Prime, the web content companies go to great lengths to make sure you can binge in high def. The same goes for cloud services, for whom performance on the user’s end means everything in their busy, competitive market.

In recent years, the big push has been to improve the quality of these high-bandwidth web services to users outside of the top metros like New York, Los Angeles, or San Francisco. And the best way to do it has been caching the most popular content or web-application data on servers closer to the so-called “tier-two markets,” places like Phoenix, Minneapolis, or St. Paul. This push has created a whole new category of data center service providers that call their facilities “edge data centers.” These are facilities that quite literally extend the “edge” of the internet further from the traditional internet hubs in places like New York, Northern Virginia, Dallas, or Silicon Valley.

Examples of companies that describe themselves as edge data center providers include EdgeConneX, vXchnge, and 365 Data Centers. Building something that can be truly called an “edge data center” requires a different set of considerations than building your standard colocation facility. It’s about creating interconnection ecosystems in cities away from the traditional core markets.

That EdgeConneX went from zero data centers two years ago to two dozen today and growing, and that vXchnge bought eight Sungard data centers in tier-two markets in one go earlier this year illustrates just how quickly demand for edge data centers is growing.

The Edge is a Place

Ultimately, location is the main way for companies like EdgeConneX to differentiate from the big colo players like Equinix or Interxion. Edge data center providers are essentially building in tier-two markets what Equinix and its rivals have built in the big core markets: hubs where all the players in the long chain of delivering content or services to customers interconnect and exchange traffic. These hubs are where most of the internet has lived and grown for the bulk of its existence, and edge data center companies are building smaller hubs in places that don’t already have them but are becoming increasingly bandwidth-hungry.

Take for example CloudFlare, a Content Delivery Network and internet security services company. To host its infrastructure in all the top markets, CloudFlare uses the big colos, including Equinix, Interxion, and TelecityGroup, which Equinix recently acquired. But it also recently became an EdgeConneX customer, because EdgeConneX could extend its network to places where the likes of Equinix don’t have data centers, Joshua Motta, director of special projects at CloudFlare, said.

You don’t see Equinix facilities in places like Phoenix, Las Vegas, or Minneapolis, he said. The distinction isn’t as clear-cut as it may seem at first, however. While it’s true that Equinix doesn’t have facilities in those three markets specifically, it does have presence in other cities that can be considered second-tier markets: places like Boston, Denver, and Philadelphia. But the size of Equinix data centers in those markets is very small compared to its marquee facilities in Silicon Valley, New York, London, or Frankfurt. Compare, for example, the nearly half a million square feet across seven Equinix data centers in the New York metro to 13,000 square feet in a single facility in Boston, and you’ll get the idea.

Transport Versus Peering: a Question of Cost

Boston is also an example of a market without a good data center option for CloudFlare, Motta said. There are plenty of data centers in town, and there is even an internet exchange, but there isn’t a data center where transit providers (companies that carry traffic over long distances), access networks (the home or business internet service providers), and content companies come together and interconnect, he said. It’s possible that this problem is specific to CloudFlare, he warned, since the company prefers not to pay for peering with access networks.