Comparing the Cloud Exchange and Direct Cloud Connectivity

A virtual cloud exchange helps reduce the complexity of building and managing a multi-cloud strategy. Find out how in this post.

virtual cloud
Matt Pinto

Jun 2, 2022


There are many reasons for rapidly growing businesses to evolve their cloud strategies from a single cloud provider to a multi-cloud environment–redundancy, resiliency, agility, and the ability to take advantage of competitive pricing. The chief disadvantage of multi-cloud strategies is complexity. So if you decide to go the multi-cloud route, you will want to leverage methods that make it as easy as possible to connect with those clouds.

Cloud exchange platforms do just that. A virtual cloud exchange service can offer rapidly growing business enterprises a way to directly connect to an array of cloud providers without the need to set up and run new physical infrastructure like inter-facility cables (IFCs) or cross connects. These platforms often use Layer 2 Ethernet services to forge connections that are high-performance, low-latency and highly secure, meeting the requirements of many businesses that are learning how to operate in a new world of widely distributed workforces.

A prominent example of how the cloud exchange concept works can be found in the Equinix ECX Fabric. If your business has a data center connection into that fabric, you can use this software-defined interconnection platform to create virtual private connections to cloud providers that also are members of the cloud exchange fabric. In addition to the performance and cloud security advantages, provisioning is fast and automated through a customer portal.

Cloud Exchange vs. Direct Cloud Connections

Cloud exchange fabrics are going to make the most sense for businesses that have a presence in a data center where there is a cloud exchange, and want an easy and automated way to virtually connect to multiple cloud providers within that data center. On the other hand, if your business only needs to connect to one particular cloud provider–Amazon Web Services, for example–then it might make more sense to use a direct cloud connection

A direct cloud connection (often referred to as direct connect) is a Layer 1 offering that allows a business to establish a private link between its private network and a public cloud. Most major public cloud providers now offer direct connect capabilities into their clouds.

Neither a cloud exchange platform nor a direct cloud connection relies on the public internet for connectivity. Connections are private and secure in both cases. One way to think about a cloud exchange connection is that it is a direct private connection from a data center, rather than from the customer location.

The image below shows how you can access the cloud via both a wired direct connection and the cloud exchange. 

direct cloud connect network diagram

Why do people use the Cloud Exchange?


Using Layer 2 virtual private connections or virtual LANs to connect through a cloud exchange to different public clouds is inherently more secure than using the public internet to do so. Many cloud exchanges also offer built-in encryption and service keys or tokens that enable a secure connection to a given cloud provider with which it exchanges these tokens.

Ease of configuration 

Cloud exchanges offer virtual and, typically, automated provisioning so businesses that go this route can easily connect to different cloud providers, or shift their connections from one cloud to another as their needs or desires change. This means that if you are currently connecting to AWS via a cloud exchange platform, you can set up a connection to Azure instead or as well, as long as the cloud provider you want to connect to is on that cloud exchange.

Customer portals, such as the one provided by Equinix as part of its ECX platform, make this a quick and easy step-by-step process:

  • A user logs into the portal.

  • Choose a provider from a menu to establish a connection to.

  • Provide their account details for connecting to that provider.

  • Choose a location to connect from, such as a physical port or virtual device, and a location to connect to through available menu tabs.

  • Select a connection speed from a variety of options that best fits your needs.

  • Review the connection details and pricing and submit your order.

Users do not have to call a provider to install or activate anything, and usually there is no need to reconfigure cables or equipment, though routers may need to be configured for BGP peering to the cloud provider, and you will want to test your connection before loading it with live traffic.

This simplicity also extends to paying for cloud exchange connections. In most cases, there is a nominal fee to become a member of a cloud exchange, and perhaps a set-up fee, with additional cost for each additional provisioned connection. Usually, this can be billed as a monthly recurring charge,with the cost dependent on bandwidth requirements. 

Direct connect options will require more physical installation and activation than the virtual connections through cloud exchanges, and the longer wait times associated with that.

Enhanced network reliability 

Using the cloud exchange within a data center offers higher reliability compared to a simple direct cloud connection line to your office. This is because, in many cases, service providers have built their data centers with reliability in mind, and have established redundant connections within their data center and their broader networks to ensure maximum network up-time. This means your cloud services and storage are available to you even when the public internet is down, and businesses around you are experiencing frustrating delays and outages.

Enhanced connection quality

Like direct connections, cloud exchanges offer private connections–but via VLANs–that will support inherent low latency, less jitter, and minimal packet loss. This means you can expect much more efficient and consistent performance when you’re trying to access services, or move data to and from your public cloud environment. 

Some cloud exchanges make specific quality of service claims. For example, Equinix offers service level agreements specifying 99.9% availability for a single port and 99.999% availability on dual ports.


There are as many cloud service options as there are clouds in the sky. Businesses can take advantage of the growing ubiquity of cloud services to establish multi-cloud access strategies that provide them with the benefits of a competitive marketplace and the ability to change and scale their cloud connection needs as they see fit. 

But creating, changing and managing connections in a multi-cloud environment can be complex. Cloud exchanges offer a fast, easy, affordable, and most importantly, a virtual method for navigating this complexity.

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