Bandwidth refers to how much capacity you have to transmit data on a network. Your network may be between two locations at your company via a private line or, more typical these days, via a connection to the Internet which is a large global network free for anyone to use as long as they are connected to it. Think of the your network or Internet connection as a pipe and your data like water flowing through that pipe. You need a big enough pipe to support the amount of data you need to send back and forth. You will be billed for the bandwidth you use - the amount of data you send through the pipe and/or the size of the pipe you need.

You might be billed based on the size of your Internet connection (the size of the pipe), the amount of data you send back and forth in terms of the exact amount of that data (such as how many gallons of water you sent and received in a month), or some calculation the amount of data you typically sent through the network over a given period of time (such as how many gallons of water you were typically sending through the pipe at at certain intervals in time in the past month).

Many companies get a private connection to the Internet or their own private network which is not connected to the Internet. For highly reliable web applications, very fast network with multiple connections and paths through the Internet for reliability and performance, with servers located in a secure location and network, application and server monitoring 24 x 7 for uptime and security, this is the best option. Although more expensive, the reliability factor and typical uptime guarantees make this option the best one for serious and mission-critical applications. We offer dedicated, private Internet circuits to colocated customers in our data centers because they provide the greatest performance and security available.

Other types of billing are most cost-effective because they create a high performance, highly reliable network connection with adequate security for most applications where the costs of implementing the network connection are distributed across multiple users. Each user on the Internet connection is billed for how much they use the network. Different types of usage based billing for bandwidth are explained below.

Some companies bill you for the amount of data you send back and forth over the network in a given month in terms of the exact measurement of that data. In other words, if you sent three files in a month and each one was 1 GB you would get billed for 3 GB in that month.

Another way to bill is to sample how much data a customer is sending over the network at different times during the month and bill for their typical or average usage. This type of billing ensures that customers who typically use more network capacity are billed more than customers who typically use less network capacity. It also allows customers to "burst" to a higher usage of the network than they typically use as needed. Often at large colocation facilities this is billed in Megabits Per Second used at the times the sample of network usage is measured at fixed intervals throughout a billing period.

If your network provider bills you on average usage, let's say they sample your MBPS usage 100 times in one month (typically it would be more like every 5 minutes) and of those samples your network usage was measured as follows: 20 times: .1 MBPS, 30 times .1.5 MBPS, 30 times 1.8 MBPS, 15 times 1.9 MBPS and 5 times at 2 MBPS. If you average all these samples you would be billed at whatever the price is in your contract for 1.395 MBPS bandwidth.

Let's say you are billed for MBPS usage in a given month at the 95th percentile. This means that your network provider will bill you for the maximum network amount of bandwidth you used 95% of the time - the top 5% of the samples would be discarded. That means for the samples in the above paragraph the 5 samples at 2 MBPS would be thrown out and you would be billed for 1.5 MBPS.

These are all just different ways of billing for bandwidth and one way is not necessarily as good as any other way. It's just like the myriad of plans available for your cell phone - you have to find the one that is most cost-effective for you based on how and when you use your phone and who you call. If you are just starting up your web site you probably won't have to worry too much about bandwidth as your usage will probably below initially. As your web site or application use increases you will want to analyze your bandwidth usage and determine which method is most cost-effective for you. Also remember that even though in the above example the average MBPS billed was lower than the 95th percentile MBPS, the price for the two might be completely different. For instance you might only be billed $100 for 1 MBPS at the 95th percentile and $500 for 1 MBPS at the average price so you would be billed more for the average usage even though the MBPS billed was lower. Be smart and choose your bandwidth billing method wisely.

Although measuring GB of data transfer and typical network usage in MBPS are both ways of billing people for network usage, they are not measuring the same thing and there is no accurate formula to predict what you will be billed via the different methods without looking at the actual data. In terms of a specific formula, if your network usage was exactly constant all the time you could say that you would get approximately 384GB of data for 1 MBPS data transfer in one month. However the reality is, your network usage goes up and down, so sometimes you will use .1 MBPS and sometimes you might use 5 MBPS. Billing for data transfer in GB is like billing how many gallons of water you used in one month. MBPS is like billing for how much water you were sending back and forth through a pipe at any given time a sample was taken during that month. As you can imagine, just because you know that you used 10 gallons of water in a month you will have no idea how much water you sent through the pipe at any given time without taking samples. You might have sent 10 MBPS all in one shot, or or you could have sent .1 MPBS 100 different times during the month, giving you two totally different usage rates for billing via MBPS. So how do you determine how much bandwidth you need if you are translating GB to MBPS? An estimate of 200 GB of data transfer for each 1 MBPS is a pretty good estimate for most applications, however your best bet will be to measure your usage.

If you purchase a private line your line will have a certain amount of capacity and you will be billed for that capacity. If you are billed based on usage, you will still have a maximum capacity for how much data you can transfer at any one point in time. For instance you may have .3 MBPS bandwidth included in your contract and then if you go over that included amount you get billed an additional fee. You will have a limit as to how much you can "burst" to over and above your included amount. Typically you can burst up to either 10 MBPS or 100 MBPS. The more bursting capacity required, the more expensive the contract will be. Beware - bursting can lead to some unexpected charges if you don't carefully monitor your bandwidth usage!

The way you utilize the network can increase or decrease your bandwidth usage. You can throttle some activities such as backups, compress large files before transferring, and configure applications to minimize bandwidth usage by taking advantage over client side capabilities to make calculations before submitting requests back to the server, for instance. Application architecture can be an important component of cost-effective network usage. It also helps to work with a colocation facility that monitors traffic and alerts you to potential problems.

Source Modified From: http://radicalsoftware.com/colocation/