Peering vs. transit
Most often, companies connect to the Internet via IP transit: you pay a network for Internet access. With peering, however, two (or more) networks exchange traffic cost-neutrally with each other. By connecting to an Internet Exchange, networks can peer with hundreds of networks.
In many cases, all around the world, the cost of traffic via peering at an Internet Exchange is also cheaper than using transit. Many organisations are therefore turning to peering to reduce costs.
Peering is about performance
Exceptions are of course possible, depending on your region and on the volume of usage of peering and transit ports. But beyond the cost discussion, peering is all about performance. Keep an eye on the follow-up articles in this series, in which we look at the performance-related benefits of peering.
If you missed the first article in the series about how peering helps you to raise your revenue, you can find it here.