Most medium to large enterprises purchase large, dedicated Internet circuits. Generally these circuits are at network hub sites, serving hundreds or thousands of users, and come from more than one ISP for diversity. Despite drastically cutting our ISP costs, we still have several large, dedicated Internet circuits.
And like a lot of enterprises, we experience peak-and-valley utilization on these Internet circuits - high utilization during the business day with very low utilization at night and on weekends.
Since we are not a content provider (Youtube, Yahoo, Google, etc) our utilization follows our business cycle. However, we are paying for the bandwidth on those circuits 24/7, even on the weekend when utilization is low. Service providers love this pricing model since you pay for bandwidth all the time. Many telecom business models are based on this concept. Enterprises pay for the bandwidth availability (it's there on the weekend just in case you need it), not just the bandwidth.
If your traffic patterns are like this, a better pricing model may be burstable circuits. In this case, you pay for a fixed rate (which can be, but is not often, 0 Mbps) and then a burst rate based on usage. If your average - "average" being the key word - goes above the fixed rate you pay per megabit (or kbps or whatever). The trick is the average. Just as carriers expect you to pay for bandwidth 24/7, the average is calculated based on the 24/7 usage. So, even though you may be peaking the circuit during the day, nights and weekends are bringing the average way back down. Furthermore, carriers calculate the average based on the 95th-percentile. This means the top 5% of utilization measurements are discarded before calculating the average. And, since you pay on a monthly basis, the average is calculated over 30-days based on 5-minute polls.
So, if your traffic patterns are similar, there's a good chance your monthly average will be low, even if your traffic spikes during the day. Hence, for example, you can get the benefits of a full DS-3 but only pay for a 5-10 Mbps committed rate. Just keep an eye on the burst rate to make sure you don't quintuple your normal bill should a sustained (i.e. several day) transfer occur.
Most carriers support burstable circuits for Internet access. Some also support this pricing model for internal networks. It's a great way to get a lot of bandwidth and keep the costs low.
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Michael Morris is a communications engineering manager at a $3-billion high-tech company. His background is in enterprise WANs working with telcos and developing large-scale routing designs. He has worked on networks at government and corporate organizations, including networks at two Fortune 10 companies. In his current role, he leads a team of 10 engineers responsible for large-scale IT networking projects and architectural standards for data networks, storage area networks, IP telephony, contact centers, and security. Michael is CCIE #11733 and recently became one of the first three Cisco Certified Design Experts (CCDE) ever (#20080002). He has 11 years experience in networking and communications, including four years as a paratrooper in the U.S. Army. He has a bachelor's degree in MIS from the University at Buffalo and is working on his MBA from NC State University. In 2008, he was awarded the Network Professional Association (NPA) Professional Excellence and Innovation Award for his work on network architecture, templates and enterprise MPLS design.
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Burstable circuits
Good article and idea, however, you must be careful since the burstable bandwidth cost may drive the cost up over a larger pipe. For instance, if you buy 10 Mbps and constantly burst it over the committed rate, it may cost you more than a 20 Mbps.
I two cents, your mileage may vary. :)
KC