There are a couple of threads below about bandwidth issues. I've seen several folks make negative comments about burstable bandwidth/95% calculations.

Seems like a good, pay for what you actually use model - i.e., if you have a Tier-1 128k dedicated stream burstable to let's say 1Mbps, that's server's going to be a rocket. Most comments seem to be directed at the 95% averaging method....Anyone care to elaborate? What are the pros/cons here?

Brandon

Disclosure - This is really market research - I'm interested in the different perspectives on this subject.

We chose not to offer any 95% pricing due to the difficulty in fully understanding and in projecting costs. If your traffic flow is very consistent then 95% is ok. However, if you have wide fluctuations, it can cost you. The two basic methods of pricing bandwidth are:

Actual or Average....take readings throughout the month...add the averages up and apply this average to the time in a month. This is normally considered the most near to "pay what you use."

95% may more closely approximate the way the provider is actually having to purchase bandwidth. It started sort of as a maximum bandwidth calculation where your maximum used at anytime during the month was used....However, 95% means the top 5% of the readings are excluded. Then you are charged for the next highest reading as if that's what you used constantly throughout the month.

Usage based on 95% calculation is generally 2 to 3 times what you would calculate on actual or average.

So, if you want to compare plans....you should compare 100 GB Actual/Average to somewhere around 200-300 GB at 95%.

As said above, we do not use 95% because on average you can know at any time what the bandwidth used to that time of the month cost. On 95% you don't have the final answer until the month is over because you don't know where that 95% measurement will end up.

Compare to charging you for electricity. The electric company charges you for what you actually use. If they used 95% (and, some do use a similar plan called peak pricing), it would be somewhat like taking a month....dividing each day into day and night...excluding the three days you used the most (assuming day usage always greater than night), taking the fourth heaviest day and charging as if every day and every night was just like it. So, one real hot day in an otherwise mild month wouldn't kill you, but four hot days and you would pay.

One day I almost got into this strange taxi. The taxi driver wanted to bill me not by the distance I was about to travel (e.g. $2 per mile) but by the 95th percentile rule on the fastest odometer reading during my travel. After thinking for a while (especially since I would be travelling mostly on the freeway/highway), I decided to take another taxi that I am more used to ....

cheers,
:beer:

Originally posted by Incognito
Compare to charging you for electricity. The electric company charges you for what you actually use. If they used 95% (and, some do use a similar plan called peak pricing), it would be somewhat like taking a month....dividing each day into day and night...excluding the three days you used the most (assuming day usage always greater than night), taking the fourth heaviest day and charging as if every day and every night was just like it. So, one real hot day in an otherwise mild month wouldn't kill you, but four hot days and you would pay.

I'm fairly familiar with this concept, it's based on demand. Basically the thought goes that the power company has to have a fixed amount of infrastructure available (transformers, wires, generation capability, etc.) to serve ONLY your needs. Once you set a new peak demand in a given (summer) month, you carry that "capacity charge" forward with you over a rolling 12 month window.

Since our business isn't seasonal, and bandwidth can be distributed just as easily across multiple servers/customers, the analogy isn't perfect but definitely similar. You could argue that the cyclical 24 hour day is a hosting "season"...based on coincidental peaks by multiple customers during business hours...

As a customer, I'd want to pay a pure average figure, as that is closely approximated as a 50% usage figure. But as a provider, I'd want to charge the 95%, because that covers my actual costs (as you mentioned) - and covers the capacity I have to provide for your peak traffic days. I'd like to think a customer would prefer a 95% figure as well, though hard to understand properly, I could be assured that sufficient bandwidth was available to meet my needs. Is it an educational issue?

For reference,

http://www.hostreviewer.com/article_105.php

Down at the bottom under Misconceptions - "It triples your 'real' bandwidth usage"

Brandon

I think 95% percentile method is more beneficial for sites which are using high bandwidth consistently with no frequent spikes.

If I'm given the choice between 100 GB based on actual usage or 300 GB based on 95th percentile, I have to check out my current bandwidth usage first. If my current sites consume about 50-70 GB monthly, whichever method I take doesn't matter much.

However, if my sites consume about 4-5 GB/day (totalling over 100 GB/month), using 95th percentile is a good bet, because I can burst up to 900 kb/s at anytime safely. There could still be some spikes (over 1 mb/s), but as long as it's not happening too often, I'll be safe and don't have to pay for the extra bandwidth.

Keep in mind that most ISP's are charged on the 95th percentile. So it is only natural that an ISP would charge it's customers using the 95th percentile. As a customer you should be aware that if you use the bandwidth you will pay for it. No one gives bandwidth away for free and if someone tells you they do they are either lying or soon to be out of business.

When a provider tells you they will give you 40GB of through-put it is basically the same as telling you they are selling you 128Kbps billed at the 95th percentile.

Another option is to cap all the customers. This can be done and I know people who do it. Most don't tell their customers. It protects the provider and lets them manage costs.

I have found that most people want to know what they're bill is going to be every month. I recommend looking at providers who are clear on their billing and bandwidth policies so you don't get surprised.

rob

Originally posted by urk5
Keep in mind that most ISP's are charged on the 95th percentile.

I know that, but why should the b/w providers do 95th percentile? Everything we use on a daily basis is charged on an actual usage; electricity, water, taxi, you name it... everything, except bandwith? My prophecy: one day bandwith will be charged based on actual usage (no matter how burstable it is)


Another option is to cap all the customers


I am lucky that my water supply at home is not capped (though I still got charged by actual usage).

cheers,
:beer:

I agree. I believe someday this will be the case.

The truth is you make more money on 95th percentile than you do on usage. That's why the long distance market is hurting.

For all the ISP's to convert to usage billing would end the
Internet. It's the sad reality.

just my 2 cents

For all the ISP's to convert to usage billing would end the Not really. 95th percentile helps with management. Say a provider has a 155 Mbps pipe and they just said "Let's bill on average". Most people would not worry about spiking in their traffic because, it all averages out. Well, what happens when every on the network does not care? See what I mean :)

95th does have a purpose, IMO.

1) I'm new at this, but as a customer, i would expect that my isp/carrier would have it together enough to charge me actual usage (i'd rather be charged less that i use), and have an infrastructure there spikes would not have any affects on performance or otherwise. If I found out my carrier wasn't & there was another carrier that did at a comparable price, i would change (unless the customer service stank).

2) How could this work for ME the customer:

30 days in a month; 30 difference day usages; why pay the 4 highest number for all 30 days?????

Answer: 1. Call 1-900-fortunecookie (find out what 4 days are you highest days and tell everyone to download on those days)
2. Better yet, tell everybody what 3 days they can log on to (cuz it will be off for 27 days), then you get it for free, right?
3. Tell everyone that you're an intellect and have figured out.

95th percentile is not really billing on an average. It is the top 95% of your usage.

An ISP would loose money if they billed on an average. To do this an ISP would have to have a flat-rate from their provider and know there utilization well enough to trust that they wouldn't get shafted by a bandwidth hog customer.

UUNet initially started on the average model and then switched to 95th percentile. This was many years back.

fun topic :-)

Originally posted by AceInTheHole

2) How could this work for ME the customer:

30 days in a month; 30 difference day usages; why pay the 4 highest number for all 30 days?????

Answer: 1. Call 1-900-fortunecookie (find out what 4 days are you highest days and tell everyone to download on those days)
2. Better yet, tell everybody what 3 days they can log on to (cuz it will be off for 27 days), then you get it for free, right?
3. Tell everyone that you're an intellect and have figured out.

Uh, that's not how it works.

UUNet initially started on the average model and then switched to 95th percentile. This was many years back.LOL, I don't think so. I actually think they were one of the ones who created 95th percentile :)

Remember that there is definatly an inbetween on this, there are several providers that will charge 70-80% of peak bandwidth to help share the cost of the spikes with the customer, which is what I believe to be the fairest way to do it.

-Brendan