Over a period of 600 minutes, 100 readings are taken of both incoming and outgoing traffic. If the billing period was also 600 minutes, the top 5% of these readings (5 in this case) are ignored, and you are billed at the value of the 95th reading.
If the top 10 readings of this set of 100 were:
| rank | bandwidth |
| 100 | 120Kbps |
| 99 | 109Kbps |
| 98 | 98Kbps |
| 97 | 80Kbps |
| 96 | 74Kbps |
| 95 | 30Kbps |
| 94 | 28 Kbps |
| 93 | 27Kbps |
| 92 | 24Kbps |
| 91 | 21Kbps |
The customer would be billed using the 30Kbps entry, falling within a 16Kbps tier.
The 95th percentile billing method is a tool many datacenters use to leverage bandwidth to their customers. Understanding this billing is very complex, and you will have to analyze if this billing method is right for you.
Every datacenter expects to have some spikes, and the 95th percentile allows customers to have alot of potential bandwidth without charging the customer for every single peak that goes over their normal commit. It is possible to be over-charged using this billing method, which is why it is important to monitor your network usage and adjust your billing plan accordingly.
