[ajross]

I don't think the idea that a "private" service within the ISP is less expensive is that obvious at all, really. Backbone bandwidth is overbuilt and comparatively cheap. Datacenter space and service management are new costs vs. just letting MS run it on their network.

[crusso]

You can be assured that they're charging for datacenter space and service management -- so that part is a wash... hell, they're probably making a little something on that.

Even if you manage to eliminate all outside telco costs, you're still going to have extra costs setting up a multi-corporate interconnect vs just routing the traffic through your own internal network.

Private service within the ISP is almost always considerably less expensive.

[ajross]

Of course they're charging for it (in this case via a subsidy from Microsoft). But they'd charge for it in either architecture. The argument is that they can get away with discounting it to their customers (i.e. dropping the bandwidth cap) because it's "cheaper".

And I don't entirely buy that, nor have you managed to sell me. You're simply asserting the same stuff without evidence: you think the cost of user-driven bandwidth (to pull content from Microsoft) is higher than managing the infrastructure to host it locally. And I don't see why that's true without numbers to back it up.

[Shanakam4]

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