“The COVID-19 outbreak had a huge impact on society and AMS-IX. Daily life was severely disrupted as a result of all the governments’ containment measures. The healthcare sector suffered (and still suffers) heavily. Governments around the world struggled to get on top of the pandemic, keeping their citizens safe and the economy going. ‘The world’ started working from home almost overnight which resulted in a steep incline of Internet traffic. Many organisations realized they need(ed) to make serious work of their digital strategy. As one of the global leading Internet Exchanges, AMS-IX had a front row seat to these developments. The exchange saw double digit traffic growth and 3 milestone peaks in just over a year, approaching the 10 Tbps peak.

The Interconnectivity market

Public Peering remains an important form of Interconnectivity. This is demonstrated by the steep incline in traffic across Internet Exchanges throughout 2020. Many of our existing customers upgraded their capacity, confirming our key role in reliable and trusted facilitation of exchanging Internet traffic. The number of new customers was relatively low in 2020, as most organisations implemented a budget freeze to wait and see what the pandemic would bring.

Despite the capacity and traffic growth, the underlying trends have not changed fundamentally. Consolidation continues to drive change in mature Internet markets. In other parts of the world, such as the Middle East, South East Asia, South America and Africa there is rapid growth as more and more users get online to benefit from digital and mobile services. This is also reflected in the growth of sea cables and data centres in those parts of the world. Finally, with technology trends such as Internet of Things (IoT), Edge and the push for 5G we are heading to a hyperconnected society that will require a solid mix of interconnectivity solutions, including Public Peering.

“In terms of business performance, I am proud of the team. They have done a great job despite the challenging circumstances”

Another important development is governments changing attitude and increasing interest in “Digital”. All aspects of life and society are moving to the virtual world, such as business, social interaction, criminality, national security, even espionage. Governments themselves are also becoming more digital in their interaction with their citizens and businesses. As an industry, we need to continue investing in the relationship with governments to bridge knowledge gaps and ‘differences’ to implement good, solid policies for our Digital Society.

Long term strategy – Innovate, Optimise, Grow

Based on our purpose of “building a better internet to contribute to a better society” we defined the following three Long Term Strategy pillars: Innovate, Optimise and Grow. Across all three strategic pillars, we see the results of the investments and hard work of the team. Together with a number of partners, we are developing new innovative solutions and services focused on open and neutral but secure exchange of data, specifically for Communities of Interest such as healthcare and other market segments.

• Innovate
  

  Innovation is essential to remaining relevant in a consolidating market. AMS-IX is investing in both Market and Product Innovation to develop new value-added services for its members and customers

• Optimise
  

  Every organisation needs to continuously optimise to increase efficiency and drive down cost. At AMS-IX, we are constantly looking for more efficient ways to run the platform and business. Therefore, we continue to invest in our Digital Transformation and create benefits from economies of scale for our customers

• Grow
  

  Size does matter. Scaling up will support the push for more value to our members and customers. Additionally, to support the greater good of the Internet and the interests of our members and customers, size matters to remain relevant and having a ‘seat at the table’ of the multiple realms of influence, such as the EU, local government and the various Internet organisations

Our tech team is constantly optimizing the platform, deploying new technology and features to improve switching and routing efficiency. Although the platform could handle the strong growth, the team spend the second half of the year upgrading and updating the platform to support further growth. The investments in our Digital Transformation are showing with the release of new CRM and ERP tooling, phasing out legacy applications, updating the provisioning technology and preparing for end-to-end process automation and customer self-service. This also resulted in the launch of the new ams-ix.me community portal in December 2020. In 2021, new functionality will become available every month.

During the year, we experienced 35% traffic growth and almost 10% growth in 100 GE ports in Amsterdam alone, signifying the relevance of AMS-IX and Amsterdam as a leading connectivity hub. Based on our IXaaS (IX as a Service) offering, we will expand further in India together with our partner Sify by adding 4 new exchanges in 2021. During the year, AMS-IX signed two more international deals with Telecom Egypt for a new Exchange in Cairo and with SNS for a new Exchange in Uzbekistan, which will both launch in 2021. International expansion will continue throughout 2021 and beyond with many opportunities already lined up.

The company

The pandemic also had a big impact on AMS-IX. No longer able to travel to events and meet our customers and members or industry peers meant that we had to think of new ways to interact with our stakeholders. Throughout the year the team worked hard and supported colleagues in the difficult lockdown period. We also saw numerous initiatives from colleagues supporting each other, underpinning the pride of the AMS-IX team.

It took a while to get used to recruiting new employees through videoconferencing, let alone onboarding them, but we managed to do so and strengthen the team with a number of talented new colleagues. Of course, a number of colleagues also left the organisation, most notably Henk Steenman, who retired from AMS-IX in December after 18 years of service. It has been a personal privilege and honour to work with Henk for the past three years and we will miss his knowledge and experience. (On March 1st, 2021 Ruben van de Brink joined AMS-IX as the new CTO, taking over the responsibility for the full tech team.)

In terms of business performance, I am proud of the team. They have done a great job despite the challenging circumstances. We have made many improvements in a difficult operating environment, and we have been able to maintain our momentum. I am thinking of all the updates and upgrades to the platform, passing the ISO 27001 recertification audit, multiple releases in our Digital Transformation, but also the implementation of a new Employee Management system and updating our Core Values. We also laid the foundation for a Learning Management System and an upgrade of our mail and collaboration systems in 2021. Last but not least, together we agreed on a new Job Reference Framework with the Works Council.

2020 in numbers

AMS-IX is part of an industry that did not directly experience negative economic effects of lockdowns and other restrictive measures. This also shows in the financial results for 2020. Gross revenues grew with 9% to EUR 21.0 million, primarily driven by growth in the Public Peering business and 100GE ports to deal with increased traffic due to working from home. Gross margin declined to 88.5% due to increasing data centre costs.

Personnel costs increased 6% while the number of FTE declined to 59.1. The increase in costs is mainly due to the hire of outsourced labour to support the implementation of new ERP and CRM tooling. A number of costs were lower than budgeted, most notably depreciation (EUR 1.3 million lower) and marketing and travel (EUR 0.5 million lower) due to lockdown and travel bans. Furthermore, a Deferred Tax Asset of EUR 0.2 million has been accounted for at 31 December 2020 as a result of dissolving AMS-IX, Inc. because the management believes compensation for tax purposes of part of the losses is likely.

I want to thank our members and customers for their continued trust in our services and our partners for their support in providing those services. Of course, none of this would be possible without the continued effort and commitment of the AMS-IX team. The pride the team brings to serving our members and customers every day is a joy to see and be part of. Finally, I would like to thank the AMS-IX Board for their continued support, constructive dialogue and interaction with the management team and myself.”

“Before I started working at AMS-IX, I switched jobs regularly. Every four to five years, always taking on different roles and responsibilities. For me, working in the same place for a long time was definitely not normal. Which brings me to why I joined AMS-IX in the first place…

I first came into contact with AMS-IX when I was working at SARA in the early 90s. SARA hosted an interconnection hub for scientific networks on behalf of SURFnet. This was connected to a similar node at Nikhef, to which a number of commercial networks were already linked. The exchange, in its earliest phase, already played a very important role in the functioning of the Internet.

After I left SARA, I became linked to the exchange again when I began working for AT&T. As part of an Internet architecture expertise centre, I was aware of the value an exchange could bring to the company and the community. Therefore, I became actively involved in securing management and technical stability for the platform. I took part in the foundation of the association and served as a board member for two terms, from 1997 till 2001. I think not-for-profit organisations that serve a community or communal goal are very important to the industry. This may even be one of the reasons why I dedicated the greater part of my career to AMS-IX. 

After my second term (and an interval of a few months) Job Witteman, at that time CEO of the newly formed AMS-IX, asked me to become CTO of AMS-IX. Technical management of the platform had been handed over to the company and they needed someone to oversee those activities. I said “yes” to the job, and some of my best AT&T colleagues – Steven Bakker, Ariën Vijn and Romeo Zwart- came along with me. 

If you were to ask me what the high point of my career was, I think these first few years as CTO at AMS-IX would qualify. We were a fantastic, high-performing team of excellent engineers. And we had a monumental mission: to stabilize the exchange, which saw traffic growth of 300 per cent each year. We had to put in long hours to get everything working and had to work with the latest technology available, which always comes with problems. We needed to be very pragmatic and not be afraid to make our hands dirty. It was a very demanding job and I loved it. You do your best work when you are under pressure. 

I have a nice anecdote about that time, which I recall vividly. We had just upgraded the exchange with the latest switches from Foundry - the vendor capable of delivering switches with the highest throughput at that time. However, we experienced numerous problems. Outages would occur all the time and we had to repeatedly contact the Foundry engineers to flag and fix problems. At a certain point, when we had just worked for more than 24 hours on end, one of the Foundry representatives told us that their CEO was in Paris that week and we had the opportunity to speak to him about our experiences with their product. Although I was exhausted, I did not want to miss this chance. So, I went home to take a shower, flew to Paris, interrupted his dinner and explained to him which role AMS-IX plays in the Internet and shared our experiences with his product. It was greatly appreciated. From that day on, we always had full priority and commitment from Foundry to fix any problems we might have.

At that time, we also experimented with new technologies a great deal and this resulted in many innovations, such as the use of photonic cross connects or MPLS. In a way, we had to. We couldn’t keep working 24 hours on end forever, automating and experimenting was simply the best way forward. In those days we also started the practice of full transparency. We told the community about every problem we encountered and how we fixed it - and this was greatly appreciated. 

‘We had a monumental mission: to stabilize the exchange, which saw traffic growth of 300 per cent every year’

The job did not stay this way. At a certain point in time, traffic growth was less high and the pressure on the tech team was relieved to some extent. My role changed; I started to represent AMS-IX to the outside world. I visited RIPE meetings, industry events, vendors and customers. Mainly in the Netherlands at first, but later also abroad. I also started to teach about interconnection at that time. In the press, but also at universities such as the UvA (University of Amsterdam), the University of Twente and the Eindhoven University of Technology. 

AMS-IX also became involved in serving the Internet community in standardisation initiatives. AMS-IX became active in the IETF, and helped very significantly with the development of the 100GE standard in the IEEE. And we still do, this time for example through our work for IX-API.  I also enjoyed this second period of my AMS-IX career very much, especially the interacting with different cultures. Working abroad, you meet a lot of different people, which gives you totally new perspectives on other countries. The AMS-IX ventures in Kenia, for example, were a big adventure for me and I greatly appreciate the relationships I built with our partners there. 

And now I’m retiring. Looking back at what has been achieved, I think we mainly showed the success of public peering. AMS-IX, from its early beginnings, has always played a pivotal role in the functioning of the Internet, but in those early days Internet itself did not play the role in society that it has right now. Society basically cannot function without Internet. It is interesting to consider the question what we would have done to fight COVID if we didn’t have Internet and many people could not have worked from home.

AMS-IX grew with the Internet, making public peering a commodity. Today, many organisations offer a form of peering. You could argue that the role of the exchange is diminishing. On the other hand, however, I think the general idea behind public peering - direct interconnection is always better and more cost-effective than interconnection via an IP transit middleman - will endure. 

Last, I would like to thank everyone who has ever worked at AMS-IX. You made AMS-IX what it is today.”