95th percentile explanation
IP transit is normally charged based on data consumption using the 95th percentile, which enables companies to be charged based on the needed capacity of their bandwidth rather than being charged for the maximum or average use. The extra 5% allows a burstable rate for unplanned or short periods of increased bandwidth without financial penalties. The 95th percentile enables you to peak over the paid limit by an unlimited amount for 5% a month which is circa 36 hours.
Advantages of 95th percentile
- Clients are not charged for the top 5% of bandwidth utilised in any given month
- Billing is not based on total monthly traffic
- Can be used to reduce large fees caused by DDoS attacks
- Enables users to “burst” beyond their allocated bandwidth
The 95th percentile is a mathematical calculation which is utilised to appraise regular and continued use of a network internet connection in terms of how much capacity is used. Whilst data contained in packets themselves cause no intrinsic cost when travelling across the network, the infrastructure, maintenance and links creating the network itself do cost money to set-up and support.
As the 95th percentile reflects the needed capacity of a client, it more often utilised as part of peering and corporate network pricing rather than traditional ISPs who need more detailed and Committed Information Rates (CIRs) in order to plan, manage and share their network accurately.
How is the 95th percentile calculated?
The 95th percentile is calculated by measuring bandwidth being used, usually at 5 minute intervals, which is then logged over the course of a month. These samples of bandwidth usage are then sorted from highest to lowest usage and the top 5% of the samples are then discarded. The next highest amount then becomes the amount that is billed.
Custodian Data Centres uses the 95th percentile as part of its billing procedure which enables us to offer fair and open overage fee pricing options. Should clients exceed their bandwidth commitment, overages are charged at +35% of their current rate. However, this is partly refunded if the client decides to increase their on-going committed bandwidth based on the 95th percentile data that is created.