Trading Desk: Offers Change Hubs into Trading Centers

By Khali Henderson

Posted: 01/2001

Offers Change Hubs into Trading Centers
By Khali Henderson

Neutral collocation facility operators are moving beyond real estate and
access management to provide services that will facilitate city-to-city and
metro capacity trading.

Telx (www.telx.com), which has operated a
neutral collocation facility at 60 Hudson St. in New York for the past three
years, is adding what it calls an Intelligent Facility Management System by
installing an intelligent optical cross-connect technology from an undisclosed
vendor. The switch will let telx intelligently manage cross-connects for the
more than 100 network service providers in its facility, says Hunter Newby,
executive vice president of strategic planning for telx.

"Right now, they [carrier] order cross-connects to each other and we
provision them. That’s going on every day. All we are doing now is putting
intelligence in the middle … no more manual cross-connects."

The process is managed remotely by computer as the carriers are pre-connected
to the switch. This "view," will be accessible by telx carrier
customers as well, he says.

The benefits are "within minutes" connections and quality of
service monitoring. Of the former, Newby, says its value to carriers is
negligible since most are unable to bill in increments less than 30 days. The
ability to monitor QoS is "tremendously important," he says, in
enabling true commoditized trading of bandwidth. The reason, he says, is that
without the ability to determine QoS, you cannot determine non-performance and
associated liquidated damages. "Without liquidated damages, there can’t be
a trading environment like you have in energy," he says.

Newby says telx will not facilitate trades between carriers via brokering or
web-based trading floor. It’s not that he doesn’t think it’s a vital service,
but telx already is home to providers such as Band-X Inc. (www.band-x.com)
and The Global Telexchange Inc. (www.thegtx.com),
which offer such services.

Neutral collocation provider Equinix Inc. (www.equinix.com),
has decided to take that next step, rolling out a new service for residents of
its Internet Business Exchanges to facilitate buying and selling of products.
The service called Equinix MATRIX (Marketplace and Transactions Internet
eXchange) enables IBX participants to research, evaluate and negotiate services
from multiple providers through a browser-based platform and with the assistance
of dedicated Equinix staff.

Sellers can use MATRIX to provide real-time electronic catalogs of service
offerings, selectively target information to buyers, publish promotion, respond
to RFPs and negotiate deals. Buyers can search and find vendors, create and
manage RFPs and negotiate deals.

Steve Reichgut, director of product marketing for Equinix, says that unlike
other buyer-seller matching services tendered by online exchanges, MATRIX does
not foster anonymity nor does Equinix take a commission. The service, is
intended to facilitate and automate discussion and negotiation between
participants in the exchange.

By provisioning a $20,000 circuit, for example, in two days rather than six
weeks, the provider stands to improve his top line by $30,000, says Reichgut,
explainingt benefits of the MATRIX/IBX combination.

"[MATRIX] is a complement to our business model," says Equinix
customer Sean Whelan, vice president of strategic alliances for Telseon, a metro
gigabit IP wholesaler. "Telseon is all about facilitating on-demand
transactions."