Network connectivity is one of the most important things for organizations these days. Whether adopting the latest cloud technologies, developing web-facing applications for their own, crucial video conferencing, IoT, or any other requirement, connectivity is essential to almost everybody.
But companies have a hard time determining bandwidth requirements, especially when using services without a definite traffic pattern, a provider should be flexible in their offerings, plans and cycles in order to cater to all these different bandwidth wishes. Customization is key.
There are two ways providers can offer bandwidth and bill for it, each suited for different connectivity requirements: These are: metered and unmetered, or flat-fee, billing.
Unmetered or flat-fee billing
Organizations can be limited by transfer rate. It is a simple and clear plan: at the end of the month, an organization will know exactly what the bill will be as the maximum bandwidth is covered by a set amount of money.
The strong point of flat-fee is its simplicity. It is easy to communicate and is usually an easy sell. If an organization values simplicity or steady budgeting this plan might be ideal.
On the other hand, this one-size-fits-all approach forces organizations to make sure their bandwidth choice meets their requirements since they cannot exceed the preset limit. This is exactly where they usually struggle.
Metered billing is a pricing model in which you pay based on the level of usage. You receive a monthly bill to pay for your actual level of usage and nothing more. In metered billing, there is a distinction between data traffic billing, adding up all inbound and outbound GBs and billed at the end of each month, and 95th percentile billing, whereby 95% of consumed bandwidth is billed and the top 5% is discarded.
Metered data traffic billing
A pretty straightforward and common metered method: organizations pay for each GB of data transfer. This method is often used by web and virtual hosting companies where a site does not use much bandwidth on a per-second basis. It can potentially be very volatile. Bursts are not smoothed out, they get all billed .
Metered burstable (95th percentile) bandwidth billing
Metered burstable bandwidth billing allows organizations to ‘burst’ above the agreed bandwidth. This is then calculated based on the 95th percentile standard. Burstable billing gives organizations the flexibility to meet short term demand without having to commit to levels of usage they hardly ever need.
Burstable 95th percentile billing is a global industry standard. It measures bandwidth usage and at the end of each month, the top five percent (5%) of inbound and outbound traffic is waived.
Bandwidth billing made easy
When you offer a diverse set of pricing models to organizations, based on needs like bandwidth-based billing, usage-based billing and flat-fee billing, an intelligent, automated billing solution is crucial. Manual billing methods will no longer do, given the complex nature of today’s requirements.
The right billing solution will reduce errors and streamline the billing process, for both providers as well as organizations and is adaptable to quite a few challenges.
To name a few:
- Scalability: A billing solution must scale to meet the evolving demands of a growing customer base.
- Bandwidth billing: Billing based on usage allows for services based on customer’s needs.
- Usage-based billing: Expanding on bandwidth billing, usage-based allows for responding to the continuous changes of the organization’s needs. A flexible billing solution, tracking usage and billing accordingly, is essential.
We can help automate complex billing
Ubersmith offers automated billing through a scalable platform which is more than just an invoice generator. Reach out via firstname.lastname@example.org to find out more about how Ubersmith can help you make a success of your billing for bandwidth.