Wednesday, October 6, 2010

Neutral Tandem Accelerates Ethernet Exchange Rollout, Will Equinix Respond?

By David Gross

The service is still really less than a year old, but things are ramping up quickly in the Carrier Ethernet Exchange market.  Neutral Tandem (TNDM) announced today they had accelerated their deployment of Ethernet Exchanges, reaching 14 U.S. markets.   Additionally, through their Tinet acquisition, they can provide service in another 85 POPs throughout the rest of the world, including what the company describes as "hard-to-reach" countries.

This rapid deployment is clearly a response to CENX, which was co-founded by Neutral Tandem's own co-founder, Ron Gavillet, and has been signing up carriers left and right, including Cox Business last week, in addition to Verizon (VZ) and Level 3 (LVLT).   While Equinix (EQIX) has other things on their mind now, they will clearly have to figure out a strategy for Ethernet Exchanges very soon.   While this service differs from the marketplace of business-to-business cross-connects Equinix currently offers, they will either have to do something to get ahead of Neutral Tandem and CENX, take sides with either CENX or Neutral Tandem, or narrow the focus of the service to avoid becoming a second-tier provider in this area.

Telx, who is still sitting in registration, and could be awhile longer now that Equinix (EQIX) is tanking, has a partnership with Neutral Tandem to co-locate their own exchanges at seven of Neutral Tandem's U.S. POPs.   A similar partnership might not be a bad idea for Equinix.


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