95th Percentile Billing vs Usage Billing, what's better?

There are all kinds of threads and links on the internet, and this seems to be a contentious issue but I don't know why.

95th percentile is either a good deal for some or a big rip off for others, I just said it there :)

But the reality is that for MOST people who transfer low amounts of data but burst to higher speeds such as 40mbit+ even for short periods of time, then you'll pay a lot of money to do that.

Basically 95th percentile is an-old archaic method of billing and valuing data.  Why wouldn't it always be according to usage?  Well because most providers pay by 95th percentile so they like to pass  on the same model to the customer.

It makes far more sense to charge per mbit in the sense that 1mbit = 322GB of data bursting at whatever port speed you have or just the equivalent rate in GB, but of course that wouldn't be profitable.  With 95th percentile it's easy to pay for several times more data than you actually transferred and used.  Imagine if you payed more for power or water just because you used a lot of power for short periods of time even though your overall usage is miniscule?

If you can find a co-lo provider that gives you 1-2TB of flat data, that's a great deal compared to 95th percentile.  I'm so annoyed by 95th percentile that I'm considering on switching to another provider that works this way.  You'll find 9/10 people who arrogantly and rudely broadcast their thoughts about 95th percentile are people that stand to benefit by billing that way and don't want people to think otherwise.

Real Life Example of Colo Client

This is why I don't see how 95th benefits anyone but the ISP. 

Look at the exampe below.

 

Interface Current Rate Max Rate 95th %
Name Description Router In (Mbps) Out (Mbps) In Out In Out
      0.63 0.21 20.81 8.28 1.66 1.11

Only .63 mbit was transferred out and only .21 mbit was transferred in.

This is a total transfer of .84mbit which is about 270 GB of actual data transfer.

But you don't get billed for the .84mbit.  You get billed for the 95th percentile (1.66mbit) which ends up being more than twice the cost of actual data usage and transfer.

The 95th percentile in essence ends up double charging you based on how much data you transfer and how fast you transfer it (burst rate).  I can't see any possible situation where it would save you money, nor do is it fair or beneficial to the customer to pay for bursting, it should be based on usage.  If a 100mbit port speed is provided, you shouldn't be penalized for using it too quickly, but only for how much

Here's some articles on 95th percentile:

http://webdesign.about.com/od/colocation/a/aa012405.htm

http://www.antonolsen.com/2007/07/18/95th-percentile-bandwidth-tracking/

http://www.ocmodshop.com/ocmodshop.aspx?a=363&p=987


Tags:

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