Tuesday, December 29, 2015

Startups and Small Businesses: Stop Focusing on Bandwidth

Most people focus on bandwidth when they think about internet connections, but speed is only one metric for measuring internet performance. Often it's not even the right one. For example, for real-time applications such as voice and video calling, what matters most is reliability. VoIP conversations (including Skype, WhatsApp, and Google Hangout voice calls) take up minimal bandwidth - much less than 1Mb - but bandwidth has to be consistent. Even a momentary dip in bandwidth - or a couple of seconds of downtime - can make conversation impossible.

With residential internet technologies, such as cable, DSL, or Fios - even though the physical medium for Fios is fiber, its architecture is effectively still residential-grade - your actual bandwidth is constantly fluctuating and rarely if ever reaches 100% of your advertised bandwidth. It may even drop to zero at points. That's because you are also sharing that bandwidth with your neighbors in your building, and possibly your block.

I've tried to illustrate this with the image below:

if you look at the graph, you can see that most of the time the speed is relatively high, but at point 1 download speed almost drops to zero while upload speed does; and at points 2, 3, 4, 5, and 6, they both get pretty low. If you were on a VoIP call, the call would probably hang at #1; at #2, 4, 5, and 6 you would have to ask the other person to repeat themselves; and at #3 you might understand them but it would be distorted. Note that when you are browsing the web these blips may not even register or at worst are experienced as minor annoyances (eg slow page loads), but when you are using a real-time app - ie a phone call - they can make things impossible. 

On the other hand if you had a Dedicated connection, also known as Dedicated Internet Access or DIA, the graph would look like a straight line across at the bandwidth you paid for. DIA comes with a Service Level Agreement (SLA) that guarantees your bandwidth, or your money back. DIA internet with an SLA is crucial for any business that depends on its internet service or that runs its phones over VoIP and depends on working phone lines.

The other thing to know about shared connections is that with the exception of Fios they are asymmetrical. Upload speed is usually about 10% of download speed. You'll see a plan listed as 100/10, which means that the download speed is 100Mb and the upload speed is 10. Dedicated connections on the other hand are always symmetrical; a dedicated 10Mb connection has upload and download speeds of 10Mb. This is important since voice and video calling use equal bandwidth up and down. When you combine the fluctuating bandwidth of shared service internet and with their upload speeds at 10% or less of their download speeds, a 10Mb DIA connection will always beat a 100Mb shared connection for voice and video. It will usually beat a 200Mb or a 300Mb shared connection as well.

How do you know if you are getting Dedicated internet? If it comes with an SLA, it is dedicated. If you're still not sure, ask! Almost all fiber besides Fios is dedicated, and all fixed wireless that I've seen is as well [1].

The downside of dedicated internet is that it is more expensive; think of it as having your own lane on the highway vs paying to sharing the road with everyone else. It's more expensive because they provider can't get paid multiple times on the same space. On the other hand, you don't need to pay for such a high bandwidth in order to get the performance you need, and the reliability is incomparable. What kills me is that companies will think nothing of spending $15,000/month for office space and >$100,000/month for each of their software engineers, but then try to save a few hundred dollars on internet to go with cable or Fios over dedicated fiber.


[1] Fixed wireless is an alternative to fiber that uses a microwave signal to the rooftop for last mile delivery from the fiber network rather than running the fiber all the way to the building.

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