What is an Internet exchange point?

 An Internet exchange point (IXP) is a physical location through which Internet infrastructure companies such as Internet Service Providers (ISPs) and CDNs connect with each other. These locations exist on the “edge” of different networks, and allow network providers to share transit outside their own network. By having a presence inside of an IXP location, companies are able to shorten their path to the transit coming from other participating networks, thereby reducing latency, improving round-trip time, and potentially reducing costs.

How does an Internet exchange point work?

At its core, an IXP is essentially one or more physical locations containing network switches that route traffic between the different members networks. Via various methods, these networks share the costs of maintaining the physical infrastructure and associated services. Similar to how costs are accrued when shipping cargo through third-party locations such as via the Panama Canal, when traffic is transferred across different networks, sometimes those networks charge money for the delivery. To avoid these costs and other drawbacks associated with sending their traffic across a third-party network, member companies connect with each other via IXP to cut down on costs and reduce latency.