Recently, I was at a meeting of CFOs in London and the question of Cross Connect pricing arose, leading to some very lively discussion. This happens often at industry gatherings. Cross Connect pricing varies hugely and is surprisingly volatile, making it hard to forecast and creating uncertainty. I strongly believe that pricing should be both reasonable and stable, reflecting and promoting the mutual benefit that customers and datacentre providers gain from our growing and increasingly interconnected ecosystems.

Patrick van der Wilt, Commercial Director, EvoSwitch

Mixed Models
A few years ago Telegeography published top line results from a pricing survey comparing US to European pricing. The average cost of a cabinet with five cross-connects in the US was $2,860, compared to $2,120 in Europe. Cross Connect charges accounted for 50% of the cost of this configuration in the US, compared with just 17% in Europe. According to TeleGeography analyst Jon Hjembo “Operators surveyed charge between $251 and $322 for a fiber cross-connect in colocation facilities in the US, but only $33 to $59 per month in Europe. Colocation providers in the US see connectivity as a part of their revenue stream, while operators in Europe rely more heavily on space and power charges to generate revenues.”

That was in 2014. Now many European operators follow the American model. As a business with facilities on both sides of the Atlantic, EvoSwitch can see the arguments for both approaches. However, on balance, we favour lower prices and stability.

Vision of Value
EvoSwitch currently charges €22 per month for a Fiber Cross Connect. The reason for our approach is that high value interconnected Ecosystems are central to our vision for the business. These ecosystems are promoted by us, and benefit us, making our facilities more attractive, but they are ultimately created by our customers. We believe that to achieve our vision in the long-term customers should be encouraged to derive the maximum benefit from engagement with these ecosystems. A predictable Cross Connect strategy including quality of service, fixed delivery time and stable pricing is in the interests of both EvoSwitch and its customers.

Sustainability is at the heart of the EvoSwitch business model, both in environmental and commercial terms. We were first-movers in the use of renewables and our focus on energy efficient design and operation has benefited us and our customers over the past decade. Flourishing interconnection is also at the heart of this model of sustainability. With the shift of business processes into the cloud and the ubiquitous interconnection needed to support the Internet of Everything, accelerating interconnectedness will be the key to commercial growth. Our pricing model should encourage rather than undermine this process. Cross Connects should be an enabling utility for this digital transformation, letting customers start new relationships, create partnerships, enter new markets and buy, sell, use and test new services such as the huge and growing range of cloud services available on our neutral OpenCloud platform and marketplace.

Further Reading

• Telegeography survey 2014:
• Further comment including Jon Hjembo quote:

EvoSwitch Commercial Director Patrick van der Wilt has more than 14 years of commercial experience in the data center market, having worked with TelecityGroup and IO. The success of his sales and marketing strategies is dependent on profound market understanding and insights into the implications of the latest commercial trends. View full bio