Most people have experienced the video content “spinning wheel of death” – the moment when would-be viewers go from watching their favorite video to turning off their media streaming service. It may be a major annoyance for consumers, but enterprises are also keenly aware of the huge effect latency can have on their ability to keep customers and revenue on their website. Even Amazon has reported a 1% drop in revenue for every 100ms of latency.

Previously, large enterprises like Google, Yahoo and Facebook used content delivery networks (CDNs) to efficiently distribute static content to its traffic. But when it comes to frequently-updated web pages like Facebook feeds, a static content source proved to be inefficient – a data center located in a place far away from the end user would still need to provide the content.

But as the demand for content increases, enterprises that rely on content access are turning to local Internet exchanges (IXs). Disparate content providers and enterprises can now exchange traffic closer to the source without backhauling it to a faraway data center, significantly cutting latency and reducing costs. Designed to deliver on the end user expectation of immediacy, these IXs are often a grouping of cooperative providers inside a small data center or a modularized grouping within a large data center.

This model was previously reserved for only the largest Tier 1 markets. Today, we are seeing this infrastructure model moving down-stream to Tier 2 and Tier 3 markets thanks to companies like EdgeConneX partnering with local IX providers. Local IXs also enable content providers to scale where their greatest levels of demand are located.

That’s what makes placing content closer to the edge of the network so special. Local IXs are starting to grow in popularity as they reduce costs for both over-the-top content providers and enterprises in an increasingly content-hungry market. Those changes, along with other innovations like the evolution of the WAN, have made this a promising time for enterprises looking for the next telecom innovation.

Want to learn more about how IXs can lower network latency? Click here to download our “Internet Exchanges Go Local” article.

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