HOW VOLICO BILLS FOR BANDWIDTH
95th percentile billing, explained and analyzed.
What is 95th percentile billing?
You will hear the term “95th percentile billing” when a provider sells Internet bandwidth at a variable rate. Instead of capping your port, the provider bills for the demand you actually use. Data center colocation facilities, dedicated server providers, and large ISPs use these rate plans worldwide. The method is also known as burstable billing.
This way of metering bandwidth gives Volico Data Centers clients a non-blocking, burstable service. Your traffic can grow when it needs to, and the billing stays transparent.
How is 95th percentile measured?
Volico measures the amount of data that crosses your network port(s). Over each monthly billing cycle, our system records 8,000 five-minute samples in a SQL database. We then sort the samples from lowest to highest. The top 5% represent short bursts of traffic, so we discard them. After that, the highest remaining sample becomes your 95th percentile rate. That rate covers 95% of your traffic across the whole billing cycle.
Volico bills on either your incoming or your outgoing 95th percentile figure, whichever is greater. We never add the two together.
Why 95th percentile billing benefits Volico clients
Almost every business runs part of its operation online, so computers and networks keep the work moving. Bandwidth sits at the center of that. You pay for it much like water or electricity at home, since the bill follows how much you use each month. It does not stay flat like a cell phone or cable TV plan.
Bursting the budget
Some months your home water or electric bill runs higher than usual. For example, a water line might burst while you are at work and flood the yard. A weeklong heat wave can also keep the air conditioning running around the clock.
These short bursts may add up to less than 5% of your usage in a month. Even so, they can wreck a budget because they push the bill well past what you pay the other 95% of the time.
Paying the 95th percentile
Imagine if your utility ignored those occasional spikes and charged you only for your steady, everyday demand. The top 5% of your demand curve would simply drop off the bill.
Now apply that idea to your online business and the bandwidth it pays for each month. Most companies pay for demand, like a home electric bill, rather than a fixed plan such as a cable TV or streaming subscription.
Your business may see bandwidth surges during sales, promotions, or a burst of media attention. In other words, your traffic is seasonal or occasional. Under many billing models, those short surges cost a lot of extra money.
How does 95th percentile billing work?
When you buy bandwidth based on demand, 95th percentile billing is one of the fairest methods available. Volico uses it because it charges for your real, sustained usage rather than rare spikes.
Here is how it works. We split the billing cycle into 8,000 samples of five minutes each, covering both incoming and outgoing traffic. Then we sort the samples from highest to lowest and drop the top 5%, including any short bursts in or out. The highest sample left is the 95th percentile, and it represents 95% of your traffic for the cycle.
This billing model has been a staple of how Volico delivers value to customers. It is an industry standard in colocation, and for bursty traffic it usually works out better than other billing methods. Volico Data Centers customers can choose either 95th percentile billing or flat rate transfer. For more on bandwidth plans, read our unmetered hosting, traffic and bandwidth guide.
Worked examples
Example 1: 100 traffic readings
Say we take 100 readings of incoming and outgoing traffic over 500 minutes. We discard the top 5% (the five highest readings) and bill you at the 95th reading. Here are the top 10 readings from that set of 100.
Recorded traffic
- Poll 100: 640Kbps
- Poll 99: 440Kbps
- Poll 98: 170Kbps
- Poll 97: 69Kbps
- Poll 96: 40Kbps
- Poll 95: 30Kbps (billed usage)
- Poll 94: 28Kbps
- Poll 93: 27Kbps
- Poll 92: 24Kbps
- Poll 91: 21Kbps
Example 2: a weekly large download
Take a colocation customer with one 1U server and a contract for one Meg of service. On a normal day, they use 1 to 2 Megs of bandwidth. Every Friday, they download a large file that uses 5+ Megs for 15 minutes. With 95th percentile billing, those Friday bursts land in the top 5% of samples, so we discard them. Across a month, the Friday downloads add up to about one hour of spikes. That hour sits well inside the 36 hours of traffic we discard before billing at the 95th percentile.
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