The difference lies in how bandwidth is measured and billed between the 95th percentile method and the approach typically used by most web hosting companies. Let’s explore both:
- 95th Percentile Method:
- Measurement: With the 95th percentile method, bandwidth usage is measured over a defined sample period (e.g., one month). Data transfer measurements are taken at regular intervals (e.g., every 5 minutes) throughout the period.
- Calculation: After discarding the top 5% of data measurements (outliers), the remaining data measurements are sorted in ascending order. The 95th percentile is then calculated based on the highest sustained level of bandwidth usage that is equalled or exceeded for only 5% of the sample period.
- Billing: The customer is billed based on the calculated 95th percentile value. This approach allows for more accurate billing by focusing on sustained usage rather than short-term spikes. It ensures that customers are not penalized for occasional traffic bursts while paying for the average sustained bandwidth usage.
- Traditional Web Hosting Billing:
- Flat Rate: Many web hosting companies offer flat-rate bandwidth plans where customers pay a fixed amount for a specified amount of bandwidth per month (e.g., 100GB, 1TB).
- Overage Charges: In cases where customers exceed their allocated bandwidth limit, additional charges may apply. These charges can be based on a per-GB basis or predetermined overage fees.
- Predefined Tiers: Some hosting providers offer different tiers or packages with varying levels of bandwidth allocation. Customers can choose a package based on their expected bandwidth needs.
- Burstable Bandwidth: Some hosting plans may provide “burstable” or “unmetered” bandwidth, where customers have a predetermined maximum limit but can exceed that limit temporarily without incurring additional charges. However, sustained high bandwidth usage may result in the need to upgrade to a higher plan or pay additional fees.
The main difference between the two approaches is how billing is determined. The 95th percentile method allows for more granular and usage-based billing, focusing on sustained usage patterns. Traditional web hosting billing, on the other hand, often offers fixed bandwidth allocations or predefined tiers, with additional charges for exceeding those limits.
The choice of billing method depends on the hosting provider’s business model, the target customer base, and the ability to accurately measure and track bandwidth usage. Some hosting providers may opt for one method over the other based on their specific pricing and billing strategies.