Carrier neutral data centers are crucial pillars of global connectivity, providing uninterrupted access to vital internet services 24/7. These independent colocation facilities form an essential part of the internet’s infrastructure, underpinning its operation and ultimately enhancing network reliability for end users.

Carrier neutral data centers are facilities enabling interconnectivity among various network providers, allowing customers to access diverse services without being tied to a single carrier. They serve as unbiased network hubs for content and application companies to reach enterprises and consumers.

Dgtl Infra delivers a comprehensive analysis on carrier neutral data centers, contrasting them with carrier-specific facilities, and categorizing them into various types. We further examine the many advantages of carrier neutral data centers, such as improved connectivity, cost efficiency, and network reliability. Additionally, Dgtl Infra provides an in-depth look at the range of services offered by these data centers, including colocation and cloud services, and discusses the key providers and geographical distribution of this critical infrastructure in the digital landscape.

What is a Carrier Neutral Data Center?

A carrier neutral data center is a facility offering interconnectivity among various telecommunications carriers, internet service providers (ISPs), and colocation providers. This facility allows customers to choose from multiple providers or use several simultaneously, without being locked into a single carrier’s infrastructure.

Carrier Neutral Data Center Facility in a Colocation Environment with Information Transmission

Typically situated in large metropolitan areas where demand for content and applications is high, these carrier neutral data centers cater to a range of companies. Networking companies, e-commerce and content providers, financial exchanges, cloud service providers (CSPs), software as a service (SaaS) providers, and enterprises all use these facilities to establish points of presence (PoPs). At these PoPs, they place networking equipment, servers, and storage devices to create digital ecosystems.

The carrier neutrality of these data centers represents an unbiased telecommunications and network environment. Unaffiliated with any single telecommunications provider, they allow many carriers to extend their fiber optic networks into the facility, to offer services to the customers of the data center. This allows content and application companies to connect to essential telecommunications networks to reach enterprises and consumers.

Common alternate names for a carrier neutral data center include network neutral data center, carrier neutral facility, carrier hotel, interconnection hub, and peering hub.

Understanding Carrier-Specific Data Centers

Data centers are generally classified into two types: carrier-specific and carrier neutral.

Carrier-Specific Data CentersCarrier Neutral Data Centers
NetworkTypically bound to a single carrierOffers access to multiple carriers
FlexibilityLimited flexibility as services are tied to the specific carrierHigher flexibility in choosing and changing carriers
PricingPricing dependent on the carrier’s policy; may not be as competitiveCompetitive pricing due to the presence of multiple carriers
ReliabilityReliability is dependent on the single carrierIncreased reliability due to multiple carriers that can take over
LocationOften the only option in non-major citiesLarge metropolitan areas
OperatorsVerizon, AT&T, VodafoneEquinix, Digital Realty, CoreSite

Carrier-specific data centers are dependent on their own telecommunications network for connectivity. They are owned, operated, or significantly influenced by a single telecommunications company, such as Verizon, AT&T, Vodafone, or Telefónica. This arrangement limits customers to using only the services and connectivity options provided by that specific carrier.

In contrast, carrier neutral data centers, operated by companies such as Equinix, Digital Realty, and CoreSite, offer access to multiple carriers, providing more flexibility, reliability, and better pricing.

Customers at carrier-specific data centers often only have one or few options for connectivity services. This situation can lead to disadvantages such as high prices, sudden changes in service or pricing, limited bandwidth, and a lack of competitive options, as customers are dependent on the services of the provider to which the data center is affiliated.

Historically, network providers primarily relied on a limited number of carrier-specific data centers, known as network access points (NAPs), to exchange traffic with each other. Major telecommunications companies built these data centers mainly to sell bandwidth and to target customers with significant needs for managed services, as part of their pricing structures. However, these facilities have largely become obsolete.

Types of Carrier Neutral Data Centers

Carrier neutral data centers are operated by companies that are not telecommunications carriers themselves. Instead, they depend on third-party carriers to provide connectivity services to their customers. The range of carriers hosted in these carrier neutral data centers varies depending on the facility’s size and location:

  • Small or Regional Data Centers: These facilities typically accommodate between 2 and 10 carriers. They primarily feature major local or national providers such as Verizon, AT&T, Comcast, and Cox Communications in the United States
  • Large or Major Market Data Centers: Located in urban areas or at regional internet exchange points (IXPs), these data centers often host 10 to 100 carriers. They include a diverse mix of international, national, and regional providers. Notable examples are Lumen Technologies (formerly CenturyLink), Windstream, Zayo, British Telecom (BT), and NTT Communications
  • Top Tier Data Centers: As global internet hubs, these facilities host an extensive range of 100 to over 400 carriers, featuring global companies and service providers. In addition to the carriers mentioned above, these facilities often host carriers like Cogent Communications, Tata Communications, Vodafone, Telefónica, and China Telecom

Benefits of Carrier Neutral Data Centers

Carrier neutral data centers play a crucial role in the landscape of data management and internet infrastructure.

Cross Connect Cables Link to a Switch in a Data Center Environment

Here are six key benefits of using these facilities and why they are important:

1. Connectivity and Network Diversity

Carrier neutral data centers provide access to multiple telecommunications and network providers. This diversity allows customers to select carriers and internet service providers (ISPs) based on factors like price, service quality, and reliability, ensuring the best possible connectivity for their specific needs.

For example, these facilities host specialized connectivity providers, including those offering ultra-low-latency links between stock exchanges (such as NYSE or NASDAQ) and the computing equipment of high-frequency trading firms. Additionally, carrier neutral data centers serve as shared access points for connecting to subsea cables, like Trans-Atlantic systems, facilitating global data transmission.

Ultimately, the presence of leading network providers in these carrier neutral data centers attracts more companies, creating a network effect. Businesses gravitate towards facilities used by their partners to reduce costs and improve operating efficiency.

Case Study – Equinix’s Ashburn Campus

A prime example of this ecosystem is Equinix’s data center campus in Ashburn, Virginia. Starting as a single building with 400 cabinets and less than 1 megawatt of power capacity in September 1999, it has expanded to 15 data centers, featuring over 32,000 cabinets, 111 megawatts of power capacity, and more than 38,000 interconnections. In nearly 25 years, this growth has positioned Equinix’s Ashburn campus as a hub for carrier neutral data center services in Northern Virginia.

This network effect and ecosystem have led many enterprises to extend their corporate wide area networks (WANs) to these interconnected, carrier neutral environments. For instance, at Equinix’s Ashburn campus, customers can access network services from over 200 providers. This allows for seamless integration with a wide array of network, cloud, and IT service providers.

2. Cost-Effectiveness

Carrier neutral data centers deliver cost savings in multiple ways:

  • Reduced Bandwidth Costs: Carrier neutral data centers can lower networking costs related to bandwidth by approximately 25% to 40%, compared to carrier-specific facilities. This cost reduction is possible because of the competition among multiple carriers within the same facility, enabling customers to negotiate better pricing with various providers, given the presence of alternative providers in the same facility
  • Internet Exchange Points (IXPs): Carrier neutral data centers often host internet exchange points (IXPs), which can decrease transit costs by up to 50% through peering agreements
  • Cloud Services Access: Carrier neutral data centers typically offer more affordable access to major cloud service providers (CSPs), such as Amazon Web Services (AWS) and Microsoft Azure. They provide direct connectivity to these cloud providers through services like AWS Direct Connect and Azure ExpressRoute. This direct connection is not only more cost-effective than routing traffic over the public internet but also provides lower latency and ensures consistent uptime

3. Reliability and Redundancy

Carrier neutral data centers host multiple carriers, enabling businesses to establish redundant network connections under stringent service level agreements (SLAs). This multiplicity of carriers enhances network reliability and substantially reduces the risk of downtime. Redundancy is primarily achieved through cross connects – physical cable links that connect a customer’s network equipment to various carriers’ equipment.

For example, a business may house its server or networking hardware, such as switches and routers, in a rack within the data center. These devices are physically connected to the networks of multiple telecommunications carriers through cross connects, which can be fiber optic, copper, or coaxial cables. This connection typically takes place in a dedicated space known as a meet-me room (MMR), where the networking gear of different carriers and customers converge.

In the event of a service outage from one carrier, these setups are designed to reroute traffic to another carrier’s network seamlessly. As a result, customers using carrier neutral data centers benefit from higher availability, striving for 99.999% uptime, since they are not reliant on a single carrier and can maintain connectivity as long as alternative carriers are operational.

4. Network Performance

Carrier neutral data centers improve network performance by offering access to an extensive array of telecommunication carriers, internet service providers (ISPs), content delivery networks (CDNs), cloud service providers (CSPs), and application service providers. This wide selection allows customers to choose the fastest and most efficient networking routes for their data, leading to optimized information flow.

IT Technician Connecting Network Cable to Server Rack in Computer Facility Room

These data centers feature multiple points of presence (POPs), serving as gateways to the internet. POPs facilitate connections to a wide range of network points, such as those operated by telecommunications companies (carrier POPs), local telecom buildings (Central Offices, or COs), and mobile phone communication facilities (mobile switching centers, or MSCs). This abundance of connection options allows carrier neutral data centers to transmit and receive data more quickly and reliably, thereby enhancing network performance.

5. Reduced Latency

Carrier neutral data centers provide customers with “zero mile” access to robust connectivity, which refers to the facility’s direct and immediate connectivity to major internet backbone networks, without the need for local loop or long-haul fiber connections. By being directly connected to the primary networks that form the core of the internet, data can travel to and from the data center more quickly, reducing latency.

Carrier neutral data centers reduce latency through direct interconnections, commonly known as cross connects, between diverse networks. Such direct connections decrease the physical distance that data must traverse from its origin to its destination, resulting in reduced propagation delay. Consequently, this can reduce latency by up to 50% compared to internet-based routing, leading to quicker information exchange.

6. Flexibility and Scalability

Carrier neutral data centers allow businesses to easily scale their operations up or down. Companies can switch carriers, increase bandwidth, rent additional colocation space, establish new interconnections, or employ new services without relocating their IT infrastructure or changing data center locations.

Additionally, carrier neutral data centers provide access to other data centers and services across many metropolitan areas worldwide. This accessibility enables businesses to deploy and scale network components, connectivity, and services more effectively and closer to their customers’ users and resources.

For instance, Equinix, the world’s largest colocation provider, operates 251 carrier neutral data centers in 70 metropolitan areas across 32 countries. Many of these facilities are interconnected by Equinix Fabric, a software-defined interconnection service. This service allows businesses to connect globally with a wide array of networking, storage, compute, and application service providers using virtual connection speeds of up to 10 Gbps.

Services Offered by Carrier Neutral Data Centers

Carrier neutral data centers, which offer a range of services to customers from various carriers or network providers, typically deliver the following common services:

Colocation Services

Colocation services, a primary offering of carrier neutral data centers, provide customers with physical space to house their servers, storage systems, and networking equipment. These services deliver a secure and well-maintained environment, comprising essential infrastructure support such as rack space, power, cooling, networking, and physical security.

Carrier Neutral Data Centers a Facility for Colocation Extends with Rows of Servers

There are two main types of physical spaces available for carrier neutral colocation, each catering to different network-to-network interconnection needs:

  1. Meet-Me Room (MMR): Often found within a major carrier hotel or a wholesale data center facility, MMRs are typically smaller spaces, usually not exceeding 5,000 square feet. They are designed for more concentrated and specific networking needs
  2. Carrier Neutral Data Center: These facilities are larger than MMRs and can be standalone buildings, separate from existing carrier hotels. They cater to clients requiring more extensive space and resources for their IT infrastructure

READ MORE: Colocation in Data Centers – What Is It and How It Works?

Interconnection Services

Carrier neutral data centers provide interconnection services, enabling customers to establish physical links with a broad range of telecommunications carriers, peering exchanges, cloud platforms, and SD-WAN (software-defined wide area network) providers.

Interconnection Services showing Connectivity to Carriers Peering Cloud SD-WAN Providers

These services connect disparate physical or logical networks, enhancing business connectivity. They facilitate access to network services, enable traffic exchange, and allow for easy switching between providers or adding new ones. For instance, customers can utilize interconnection services for IP transit, which is crucial for accessing the broader Internet. They also enable financial transactions, settlement functions, and business-to-business e-commerce.

Interconnection services at carrier neutral data centers offer two main options for network traffic exchange:

  1. Direct Connections: Customers can directly create one-to-one connections with service provider networks using the data center’s cross connect services
  2. Peering Connections: Customers can engage in peering with multiple parties by connecting to a shared platform at an internet exchange point (IXP), usually housed in a carrier neutral facility

Peering Services

Peering services, a specialized form of interconnection, involve mutually beneficial traffic exchange between network operators, usually without financial compensation. This arrangement enhances efficiency and mitigates the costs, delays, and performance issues associated with routing traffic through third-party transport services.

There are two primary peering types in carrier neutral data centers:

  1. Public Peering: Conducted at an internet exchange point (IXP), it involves multiple networks connecting to a shared peering platform to exchange traffic. Public peering is suitable for smaller volumes of traffic and generally comes at a lower cost
  2. Private Peering: This is a direct, exclusive connection between two networks, facilitated by a cross connect, bypassing a shared, public IXP platform. Private peering is ideal for larger volumes of traffic because it enables faster and more secure data exchange

READ MORE: Cross Connects and Interconnection Services in Data Centers

Cloud Services

Carrier neutral data centers offer direct access to major cloud service providers (CSPs) through high-speed, dedicated connections called cloud on-ramps. These on-ramps enable faster, more reliable, and secure connections compared to the public internet. The most commonly available cloud on-ramps include:

  1. Amazon Web Services (AWS) via AWS Direct Connect
  2. Microsoft Azure through Azure ExpressRoute
  3. Google Cloud with Google Cloud Interconnect
  4. Alibaba Cloud accessed through Alibaba Cloud Express Connect
  5. Oracle Cloud via Oracle FastConnect
  6. IBM Cloud using IBM Cloud Direct Link
Diagram of Cloud On-Ramps Connecting to Amazon AWS Microsoft Azure Google Alibaba Oracle IBM

Using these cloud on-ramps results in lower latency, higher throughput, and more consistent network performance. The dedicated connections enhance security as data is less exposed to the vulnerabilities of the public internet. Furthermore, cloud on-ramps can reduce data transfer costs, particularly for large volumes of data.

Carrier neutral data centers hosting cloud on-ramps enable businesses to efficiently operate hybrid and multi-cloud deployments. They allow seamless integration of on-premises infrastructure with multiple cloud services.

For instance, the following map demonstrates how Equinix, the world’s largest carrier neutral data center provider, hosts two or more major cloud on-ramps in almost all of its top 50 data center markets globally:

In total, Equinix has more than 210 cloud on-ramps worldwide. Notably, in 25 markets, Equinix hosts the top three cloud service providers simultaneously, and in 12 markets, it hosts five or more of the major cloud service providers concurrently.

Managed Services

Managed services in carrier neutral data centers comprise a variety of IT solutions, including server management, storage management, and network management, as well as disaster recovery and backup services. The main goal of these managed services is to reduce the burden on a customer’s IT staff. This allows the IT staff to concentrate on strategic business goals and managing applications, rather than on maintaining the data center’s infrastructure.

While carrier neutral facilities typically employ their own personnel for basic services like remote hands (e.g., cable management and basic equipment troubleshooting), they often collaborate with third-party vendors for more specialized or technically demanding tasks. These tasks include smart hands services, such as equipment configuration and installations.

IT Engineer Holds a Bundle of Network Cables for Connection to Server Equipment

Utilizing third-party vendors for managed services enables a carrier neutral data center operator to maintain its ‘neutrality’. This strategy is designed to make the data center a preferred destination for managed service providers (MSPs), such as Rackspace, Dell, Kyndryl, and many others.

By doing so, it creates an ecosystem of MSPs, ensuring they compete on a level playing field and providing them with promotional support in marketing their products through the data center operator’s own marketplace, such as Equinix Marketplace and Digital Realty’s MarketplacePORTAL.

READ MORE: Data Center Managed Services – A Comprehensive Guide

Who are the Carrier Neutral Data Center Providers?

Carrier neutral data center providers, also referred to as network- or carrier-neutral colocation providers, offer versatile IT infrastructure environments. They typically adopt one of three operating models: retail, wholesale, or hyperscale. These providers operate data centers for multiple third-party customers, providing a shared infrastructure.

Prominent among the carrier neutral data center providers are Equinix, Digital Realty, NTT Global Data Centers, CyrusOne, Telehouse (KDDI), CoreSite (part of American Tower), Global Switch, QTS Data Centers, Switch, and DataBank. To illustrate their scale, Equinix operates 251 carrier neutral facilities across 32 countries, whereas Digital Realty has a global presence of 312 carrier neutral colocation data centers.

Differentiating features of these leading carrier neutral data center providers include:

  • Connectivity Options: They offer a broad spectrum of carriers and ISPs. A top carrier neutral data center may support 100 to over 400 carriers, facilitating extensive global network coverage
  • Cloud On-Ramps: These facilities provide direct network connections to cloud services, often having at least two cloud on-ramps to major CSPs like Amazon Web Services (AWS) and Microsoft Azure. This setup reduces latency and improves throughput compared to public internet connections
  • Location: The geographic location of a data center is crucial. Factors such as proximity to internet exchange points (IXPs), latency, accessibility, and disaster resilience are important considerations
  • Reliability: The uptime of these data centers is often quantified by data center tier ratings (Tier I, II, III, IV), reflecting their design and operational track record

Case Study – New York Metro Area

In the New York metro area, Equinix stands out as a leading carrier neutral data center provider. It operates 9 data centers in the metro area, encompassing over 729,000 square feet of colocation space. These facilities serve 1,125 customers and facilitate over 32,000 interconnections. They host a diverse mix of clients, including financial services and ad-tech companies. Additionally, Equinix’s New York sites offer cloud on-ramps to four major cloud service providers (CSPs): AWS, Microsoft Azure, Google Cloud, and IBM Cloud.

Map of New York and New Jersey Displaying Equinix Data Centers
Source: Equinix.

As shown above, the Equinix campus in Secaucus (comprising NY2, NY4, NY5, and NY6) connects to over 100 networks, more than 660 enterprises, over 270 cloud IT services, and more than 75 content and digital media companies.

Where are Carrier Neutral Data Centers Located?

Carrier neutral data centers are generally located in major cities and key network hubs around the world due to the high demand for connectivity and data services in these areas. Examples include:

  • United States: Northern Virginia, Dallas, Phoenix, Chicago, Northern California (Silicon Valley)
  • Canada: Toronto, Montreal, Vancouver
  • Europe: London, Frankfurt, Amsterdam, Paris, Dublin
  • Asia-Pacific: Beijing, Shanghai, Tokyo, Singapore, Sydney, Hong Kong, Seoul, Mumbai
  • Latin America: São Paulo, Mexico City (Querétaro), Santiago, Bogotá
  • Middle East & Africa: Dubai, Tel Aviv, Riyadh, Johannesburg, Cape Town

What is a Carrier- and Cloud-Neutral Data Center?

A carrier- and cloud-neutral data center is a type of data center facility that allows customers to use telecommunications and network services from a variety of carriers and cloud providers. This neutrality means that the data center does not favor or promote any specific carrier or cloud provider, ensuring customers have the flexibility to choose vendors and services based on their specific needs and preferences.

Carrier and Cloud Neutral Network Server Rack with Ethernet Cables and Monitoring Lights

Carrier- and cloud-neutral colocation data center providers are often sought after for their ability to provide more options for connectivity, redundancy, and cost-efficiency, enhancing the customer’s control over their network and cloud-based services.

Mary Zhang covers Data Centers for Dgtl Infra, including Equinix (NASDAQ: EQIX), Digital Realty (NYSE: DLR), CyrusOne, CoreSite Realty, QTS Realty, Switch Inc, Iron Mountain (NYSE: IRM), Cyxtera (NASDAQ: CYXT), and many more. Within Data Centers, Mary focuses on the sub-sectors of hyperscale, enterprise / colocation, cloud service providers, and edge computing. Mary has over 5 years of experience in research and writing for Data Centers.

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