Bandwidth Billing

Thursday, 18 March 2010 11:45

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Waveform's Blog

If you’ve looked around the products section of our website, or spoken with one of our sales representatives, you might have noticed that we offer bandwidth on two separate metrics, 95th percentile and monthly transfer. We’re going to take some time here to talk about how both these methods work, and to explain why we use them.

Monthly Transfer

Monthly transfer is the easier to explain, so we’ll start there first. When you purchase monthly transfer, your paying for moving a specific amount of data through your network port. Say you’re package comes with 1000GB of monthly transfer, that means you can move 1000 gigabytes of data to and from your server.

We sell bandwidth this way to most of our mid-tower and 1u customers. We’ve built these package to include everything the majority of users are going to need to start with, and monthly transfer is a simple and effective way for us to state bandwidth for these customers.

95th Percentile

For rack cabinet, fractional rack cabinet, and single server customers who need more bandwidth, we calculate bandwidth billing with 95th percentile. 95th percentile is an industry standard method, and it more closely represents our costs for bandwidth.

95th Percentile, The Why

It might help to first explain why monthly transfer doesn’t really represent the cost of bandwidth. Imagine a small computer network, such as a home network, that only includes two computers and a router. If you take a file and send it from one computer to another—it doesn’t matter if it’s a 4 kilobyte text file or a 2 gigabyte film—moving those ones and zeros doesn’t actually cost you anything. The cost for your home network is in the router, the cabling, and your network interface cards. So what you’re paying for is the construction and maintenance, not the use.

Large networks operate in the same fashion, except they’re not only carrying your traffic, but the traffic of countless other users. Waveform's engineers have to design our network to handle everyone’s data at the same time, so what we’re interested in is the sustained use our customers make of the network. We calculate sustained utilization using 95th percentile.

95th Percentile, The How

When we calculate 95th percentile, we sample your utilization of the network roughly every five minutes. This gives us the speed that data is moving through your network port, generally measured in megabits per second (Mbps). We then take all that data and graph it over the course of a month, into something that looks like this:
95th percentile example

Then we take the top 5% of our samples—which is about 36 hours—and throw that data away. This means that high spikes in the graph, so long as they’re relatively short in duration, aren’t counted on your bill. After throwing out the top 5%, the next highest measurement is where we bill.

Since we chop off the top 5%, customers don’t have to pay for sudden spikes in traffic. This gives you flexibility in bandwidth billing that can come in handy if you’re site is slash-dotted or you experience a similar burst in traffic.

95th Percentile, The Waterworks Metaphor

Another way to imagine bandwidth billing is to pretend that your network port is a spigot. With monthly transfer billing, you’re paying for the amount water you take out of the spigot each month. With 95th percentile billing, you’re paying for how far you turn the valve that opens the spigot.