You prefer 95 percentile or actual data transfer?
 

Do you prefer 95 percentile or actual data transfer to bill your clients?

I think it depends on what you want to do. I actual bill the clients of mine as this is the best and easiest way to track them. You might want to do it the other way simply to make it easier for you.

A bit of an old topic but interesting discussion so I'm kicking ;)
We bill customers on 95th percentile and we buy on 95th percentile.
It's pretty hard to bill on actual usage when your upstreams bill on 95th percentlile imho.

The vast majority of our customers (99%) are billed on the basis of data transfer.

Not really - you simply setup Netflow or similar to give you the traffic analysis and transfers per IP address; Netflow (or sFlow etc..) also lets you monitor your network more closely by logging types of traffic, ports etc..

You can then also collate this data to do automatic alerting, out of character flow alerting, DoS mitigation etc..

Of course metered data transfer will be better for the client, but the host hates it. It is more or less an industrial standard that rented dedicated servers are billed using metered data transfer and colocation services are billed using 95th percentile.

You typically see data transfer with shared, dedicated server or very small colo solutions. They tend to bundle in a few hundred GB with their packages knowing (hoping) that you are not going to use it. With data transfer, it's like a "bucket" of bandwidth. Once you use it, you then pay overages per GB.

95th percentile billing is pretty standard for Enterprise colocation solutions. This measurement gives you the benefit of the doubt for unexpected spikes.

We (like most) providers buy 95% from the network. We sell in both Gigabyte and Mbit but if a client peaks a lot we will notify him that he has to buy Mbits instead of GB.

95th percentile a client perk
 

We also choose to bill in 95th percentile. When providing clients dedicated servers, we have found they prefer to have a buffer for those unexpected spikes in bandwidth. A few savvy clients have expressed an appreciation for the 95th percentile method because of response traffic from marketing campaigns. It allows them to implement promotional tactics to increase sales and still receive a cushion on their billing if there is an adequate response.