What You Need To Know When Calculating Bandwidth Costs

17th March, 2016 by

The cloud is often portrayed as a perfect solution to IT concerns. From affordability to accessibility, its merits are championed by many. However, the cloud isn’t a nebulous theoretical concept – it involves expensive hardware and requires ongoing maintenance and supervision. There’s no doubt that cloud services can represent a simple and reassuringly robust alternative to in-house platforms, but sometimes there’s a fiscal sting in the tail which comes in the form of bandwidth costs.

Hidden data transfer charges can have a considerable impact on your business when the seemingly attractive headline fee doesn’t factor in real-world usage. Bandwidth provision is rather like petrol; it’s the fuel that powers the internet and has a huge captive audience with little option other than paying the market rates. Another similarity with petrol is that the price paid by consumers is higher than the actual cost of generating and providing that resource, although in this case, the profits are appropriated by data center providers rather than the Treasury.

These are a few dangers to be aware of when discussing or negotiating data transit provision:

  1. Upstream and downstream aren’t always priced equally, and in some cases upstream data is free. It’s not unheard of for 1TB of downstream data to cost half as much again as uploading the same amount of information. Depending on your business model, this might have a crippling impact on your cost of doing business.
  2. App developers and video streaming services are particularly at risk of uneven or unpredictable bandwidth costs since they rely on cloud infrastructure to host their applications but then need to pay for their monthly data transfer at the cloud provider’s rate. Always investigate outbound transfer limits and charges before signing on the dotted line.
  3. The rising popularity of your service inflates your costs with overage charges. This might seem self-evident, but phone bills and office rentals don’t go up as you receive more incoming inquiries. An app or website may experience a spike in demand after going viral that sees transit traffic spiral accordingly. Some providers charge for traffic both to and from your servers, so calculations based on a certain number of regular users can be heavily affected by a rise in demand or popularity.
  4. It’s not just public-facing content that accrues charges. Transit charges can be levied on absolutely everything related to an app or site – images or videos hosted on separate platforms, database queries, bot traffic and more. Image caching in recipient browsers can reduce these costs slightly, but more complex applications can place very high demands on data transfer allocations if you have to pay for transit between servers on the same private network.
  5. Different payment models. As an example, Microsoft Azure currently offers pay-as-you-go or prepaid subscription models, but both of these have drawbacks. The former is more expensive per terabyte of data downloaded by your users, whereas the discounted annual prepay option requires paying up front for data that might never be needed. Upfront payments can effectively require guesswork among startup enterprises, who still won’t receive the discounts offered to larger clients.

All You Can Eat Bandwidth – If You Pay For It

And then there’s the overt cost of bandwidth provision – the headline rates charged by leading providers. Amazon’s AWS is particularly expensive for more data-heavy applications, for instance, which can cost thousands of dollars per month for a relatively small amount of data transit. Taking this into consideration, it may seem more cost-effective to cut out the middleman and deploy an in-house server. However, this requires substantial investment in hardware and network infrastructure, alongside considerable technical knowledge and the pressure of bearing responsibility for administration and firewall provision.

A more practical option is to find a company who offer transparent pricing policies and won’t penalize you for having a successful site or app. At 100TB, we can customize solutions from bare metal servers to robust content delivery networks, without any financial stings in the tail. Get in touch with us to find out why high volume data transit doesn’t have to cost the earth.