by: Bart J.R. van der Sloot
In a volatile world overshadowed by the ongoing war in Ukraine, AMS-IX begun to reap the benefits of its investments in scaling up. This includes launching new national and international locations and undergoing digital transformation, which involves implementing a new organizational structure, processes, and systems to enhance efficiency and customer experience.
As of writing this statement (March 2024), the world around us remains insecure and unpredictable. The ongoing war in Ukraine and the conflicts in Israel and Gaza dominate the news. Moreover, internet infrastructures face increased risks, with significant cable cuts in the Red Sea (reportedly linked to attacks or sabotage by the Houthis in Yemen) and with increased “surveying” activity near subsea cables in European waters.
For AMS-IX 2023 proved to be a highly successful year. International activities saw accelerated growth through the establishment of new internet exchanges in countries such as Nigeria and Thailand. These exchanges not only align with AMS-IX’s mission of “building a better internet to contribute to a better society” but also contribute to scaling up AMS-IX operations, crucial for reducing operational costs per exchange and generating funds for innovation.
While some people may view these international expansions skeptically as mere efforts to bolster AMS-IX’s image, it’s important to note that these locations are typically owned by local partners. AMS-IX provides the platform and support under the IX-as-a-Service umbrella, with the majority of risks and rewards shared with the local partner.
The growth in locations wasn’t the sole contributor to improved efficiency. Results from the Digital Transformation program and restructuring of the technical team have also played vital roles. These efforts have enabled us to focus on timely project completion and allocate more time to innovation, which is allocated approximately 2% of revenues. I expect that during 2024, we will see more tangible results from various initiatives. Some of these are closely related to our core business, such as photonic cross-connects. Others may be more distant from our core business but remain connected to it, such as the Amsterdam Data Exchange (AMdEX), which made good progress during 2023. .
In 2023, the IP interconnection market in the Netherlands followed the trends of the previous years. This included ongoing price decreases in alternative interconnection services, particularly in IP Transit, alongside the growth of alternative locations like Marseille as interconnection hubs. Additionally, there was a consolidation in access networks, with larger networks increasingly avoiding IXes. Furthermore, content traffic became concentrated among fewer than 10 content providers, leading to a shift from IX services to Private Network Interconnects (PNIs). However, despite these trends, the continuous increase in equipment, power and colocation prices has resulted in the flattening out of price declines.
Another noticeable development was the continued emergence of new internet exchanges in the Netherlands, often attempting to enter the market by offering free or low-cost ports to attract new customers. At AMS-IX, we will closely monitor these developments and ensure that our members and customers perceive the value of an exchange with a professional support team, robust security measures, and acting as “one of the voices of the internet community” in various political and regulatory debates.
Outside the Netherlands the opportunities seem endless, even in countries with established member based or commercial exchanges. The “neutral and trust based” AMS-IX brand gets us invited to the table with many new partners, with especially good traction in the Middle East and Southeast Asia.
In 2023, the AMS-IX organization and Management Team continued to stabilize with reduced employee attrition and sickness levels. Recruiting and retaining talent is an ongoing challenge for any technology company these days, but we believe that the AMS-IX activities, its culture (embracing diversity and inclusion) and its brand, in combination with competitive employment conditions, will enable the AMS-IX team to thrive in the years ahead.
I have great confidence in AMS-IX’s ability to create long term value for its members and other stakeholders. We have a seasoned and energetic management team, which is well aligned and has a constructive relation both with its employees and with the Board. We have a talented and enthusiastic pool of employees, a solid strategy, and healthy financials.
As we have seen in various growth and innovation initiatives, we should not underestimate the importance of AMS-IX’ neutrality and transparency, which have always been at the heart of AMS-IX. This really sets AMS-IX apart from other parties and enables AMS-IX to move into markets where such a governance structure is of importance to build trust and acceptance. In all my interactions with the AMS-IX team, I really recognize these values – which will play a key role in driving our future success.
On behalf of the Board,
Bart J.R. van der Sloot
Chair
