Which CDN Pricing Model Costs Less?
March 7, 2016 | Noe Garcia
In the CDN market, there are two main pricing models: per-gigabyte pricing and pipeline pricing. And depending on your traffic/request patterns and bandwidth usage, one is more cost-effective than the other. In this post, I’ll help you figure out which one that is.
Overview of Per-Gigabyte Pricing
Per-gigabyte pricing is a flexible pricing model that allows you to use bandwidth however you want, whenever you want, during the billing period. Some CDN providers sell bandwidth in packages (100GB, 5TB, 50TB, etc.). Others sell it by the gigabyte ($0.12/GB on the high side to $0.01/GB on the low side).
Per-gigabyte pricing is good for businesses that know roughly how much bandwidth they use and experience more than the occasional traffic/request spike. This is because your CDN bandwidth bill is based primarily on how much bandwidth you use – not when you use it. The consistency of your traffic/request patterns is insignificant.
A business using per-gigabyte pricing may have traffic/request patterns that look like this:
By rule of thumb, any traffic/request pattern that doesn’t work well in pipeline pricing often works better in per-gigabyte pricing.
Overview of Pipeline Pricing
Generally, pipeline pricing is offered to businesses with a large web presence. Also known as 95/5 pricing, it lets you deliver a certain amount of bandwidth for any given second of the month (i.e. 1Gbps). You can exceed that threshold, but if you do, you risk paying much more than you anticipated.
Pipeline pricing is good for businesses that have a steady rate of traffic/requests and only experience occasional spikes. This is because your CDN bandwidth bill is based primarily on what bandwidth-per-second mark you stay at or below of. (This will make more sense when we talk about the 95/5 percentile system.)
A business using pipeline pricing may have traffic/request patterns that look like this:
I’ll get to why it’s called 95/5 pricing in a minute. But first, let’s break the pipeline pricing model down into terms that are easy to understand – gigabytes and terabytes: If you’re given a 1Gbps pipeline and transfer exactly 1 gigabit per second, this gives you 324 TB per month.
Because a 1Gbps pipeline is much cheaper than paying for 324,000GB under the per-gigabyte pricing model, one might think that the pipeline model is better. This isn’t always the case though, and can lead to wasteful spending. To understand why, let’s look at the 95/5 system that pipeline pricing is often based on.
How the 95/5 Percentile System Works
This system was created to give businesses with relatively consistent bandwidth usage a break on traffic spikes. It allows you to go over your agreed pipeline limit 5 percent of the month (36 hours) – as long as you stay at or below that limit the other 95 percent of the month (28.5 days).
To determine whether you’re above or below your pipeline limit, a CDN provider may take bandwidth usage samples every 5 minutes. This means 288 samples are taken any given day, equating to 8,640 samples any given month. Following the 95/5 system, the highest 432 samples are thrown out (36 hours worth of samples, or 5%).
To determine how much you pay for that month, the highest sample is taken from the remaining 8,208 samples (28.5 days worth of samples, or 95%).
If the highest sample from the remaining 8, 208 samples is 2.1 Gbps, you end up paying much more than you would for, say, the 1 Gbps pipeline in your contract. On the other hand, if the highest sample from the remaining samples is 0.95 Gbps, you pay what you anticipated.
Related Blog Post: The Math Behind 95/5 Percentile
Effective Use of Pipeline Pricing
As we mentioned in a previous post, Canada’s largest news site experiences the occasional traffic spike and optimizes CDN spending by using pipeline pricing based on the 95/5 system.
A business making effective use of pipeline pricing may have a bandwidth pattern that looks like this for any given day:
Though you’re still responsible for paying for some unused bandwidth (orange), your traffic spike is “forgiven.” This is because the spike only accounts for 5% or less of the day. (Pricing is often determined based on the month’s usage, but showing daily usage makes things easier to see and understand.)
Even though your traffic spike is forgiven, you might be thinking Hey, I’m still paying for a lot of bandwidth I didn’t use! But remember: If you’re using pipeline pricing effectively, bandwidth under the pipeline pricing model is less expensive than under the per-gigabyte pricing model.
Ineffective Use of Pipeline Pricing
As I’ve mentioned, pipeline pricing isn’t for everyone. If a business’s bandwidth patterns resemble mountainous landscapes, money is wasted. The graph below is an example of a bandwidth pattern that doesn’t work well with the 95/5 system:
Notice how much unused bandwidth you’re paying for. Also, in this case, even the lower price-per-gigabyte afforded by pipeline pricing doesn’t help you pay less than you would under the per-gigabyte pricing model (let alone break even).
Check Historical Data
Taking a look at your website’s traffic patterns will give you a rough idea of what CDN pricing model to use. However, what will give you the best idea is historical data related to actual CDN bandwidth usage. Even if you’re not currently using a CDN, there’s a way to get this data.
Many CDN providers offer free test accounts and let you push bandwidth on a trial basis. Taking advantage of this will help you get the data you need. But if this isn’t an option for some reason, check out bandwidth usage on your origin. The patterns you see there are likely similar to the ones you’ll see on your CDN.