95th percentile billing: how does it work?

The problem: traffic is never steady

A server's throughput changes all the time. It is quiet at night, rises during the day, and sometimes spikes for a few minutes: a backup, an update, a burst of visitors.

Billing at peak throughput would be unfair: a few minutes of spike would multiply the bill. Billing by total volume (in GB) would instead penalise steady usage. The 95th percentile is the compromise used by most network operators.

The method in three steps

1. Measure throughput at regular intervals. At VexCloud, every 5 minutes, for the whole month.
2. Sort the measurements from highest to lowest, and discard the top 5%.
3. Keep the highest remaining value: that is your 95th percentile throughput.

In other words: you can exceed your usual throughput 5% of the time without it counting.

How much peak time is "free"?

A 30-day month has 30 × 24 × 12 = 8,640 five-minute measurements. The discarded 5% is 432 measurements, or 36 hours per month.

As long as your combined peaks stay under those 36 hours, they are left out of the calculation.

A worked example

Take a tunnel whose traffic sits around 40 Mbps most of the time. This month, two events:

• a data migration at 800 Mbps for 6 hours;
• a traffic spike at 300 Mbps for 10 hours.

That is 16 hours of peaks in total, or 192 measurements. Fewer than the 432 discarded measurements: all the peaks drop out of the calculation. The 95th percentile stays close to 40 Mbps.

If the same tunnel had run at 300 Mbps all month, the 95th percentile would be 300 Mbps: the calculation reflects real usage, not accidents.

Key takeaways

• Short bursts (backups, updates, traffic spikes) cost nothing extra.
• What matters is your usual throughput.
• It is fairer than peak billing, and more predictable than volume billing.

At VexCloud

The IP tunnel is billed €0.50 per Mbps at the 95th percentile, with bursts up to 50 Gbit/s. You pick your throughput in the configurator, from 5 Mbps to 1 Gbit/s, and see the price update live.

To pick the right protocol, also read WireGuard, GRE or EOIP: which one to choose?