What exactly does this mean? I've recently began trying to justify why I Shouldn't just colo a rack at a local provider's datacenter, and started looking at getting a T-1 in my own shop to start off with, but have gotten a little overwhelmed at all the terms. Also, is the pricing on a local loop FROM this same provider's shop to my office usually negotiable? He'll give me a rack and a T-1 for $895/month. I can get IP in my own office from the same guy for $400 plus an estimated $500 for "copper".

Not sure what the gotchas are starting off on my own vs. colo-ing my dedicated hosting biz with him for a while.

Nik Martin
No Name Dedicated Win2k Servers
(really, i dont have a name for my business)

Wouldn't be cheaper to colo a rack in a data center who have better connections then T1, not to mention cheaper like that.

If that T1 lines go off in your office then you are screwed. At least data centers have backups(datacenters are more redundant).

When an ISP says that they bill bandwidth on 95'th percentile, it means they do the following.

Every 5 minutes (standard, but the interval could vary per ISP) they take a measurement on their router of how much bandwidth your port is using. At the end of the month they look at the biggest spike, and take 95% of it, and charge you a per kbps rate. So if you were paying $1/K/S on 95'th percentile and you used 100k your bill for bandwidth would be $95.

Now as your your T1 questions:

There are two basic ways in which this T1 will connect you to your ISP. One being Frame Relay, that is where your home gets connected to your local telephone companies "Frame Cloud" and then your ISP connects to the same "Cloud". In NJ, a full T1 Frame Relay port is $390 monthly. The second way to connect you would be with a point-to-point T1. The price for this could vary because it is mileage sensitive. Generally the price for the loop is non-neogtiable because it is set by the telco. The only way to lower the monthly cost is to enter into a longer contract. Also a side note, I don't know why he is calling it copper, most T1's are actually fibre, unless you live in a really rural area.

Now why should you colo vs have your own T1:

1. Your ISP probably has redundant power
2. Your ISP probably has multiple connections to the internet through different providers.
3. Your ISP probably has a lot more bandwidth.

If you have a T1 in your garage, you are limited to only 1,5Mbit, if you need more bandwidth then you will need to order another full T1. If you are in a crunch situation, you may be up a creek because it generally takes around a month to have a T1 put in.

I would always reccomend colo!

I think that the values collected from MRTG will be actually listed in descending order, and you will be charged according to the value at the 95% position.

Let's assume that by the end of the month, 100 values were recorded (they are usually much more, I assume). 95% of 100 is 95, so these values will be arranged in descending order, and the value at position number 95 from the top of the list is what you will be charged for.

The difference between charging by the 95th percentile and by the average usage is that the 95th percentile is not affected by extreme values. Like if at one occurance only you were hit by a DDoS attack and mrtg recorded values that are much much higher that your average usage, these values will be usually excluded with the top 5% of the values. So 95th percentile is better for you in this situations.

In other situations, however, average bandwith might be better for you than 95th percentile. If, for example, most of your values are very low, but you occasionally get higher bandwith values. And by occusionally I mean a bit more than 95% of the time, your average might become less than the 95th percent value.

BTW, most of this I learned in biostatistics, I hope that it applies ;)