Understanding the Cost of Business Internet Service

Understanding the Cost of Business Internet Service

A question we hear often is: why is business internet service “marked up” higher than residential services? Business owners, understandably, want to know why they pay more for internet service than their residential counterparts. The short answer: we’re comparing apples and oranges. Residential and business internet, though they may seem the same to the end user, are actually vastly different. Even if, for instance, your office is much smaller than your home, the service you’ll need will likely cost a little more.

How are residential and business internet services different? Let’s dive in and take a look.

Business vs. Residential Internet: The Facts

Before we dive in, let’s explore the term “bandwidth” to set the basis for understanding the many differences between business and residential internet services. Bandwidth is best described as a road. We all know that the more traffic there is, the more congested and slow the flow of cars becomes. If thousands of people are heading home from work at 5:00 pm on a Friday, and they all have to use a two-lane highway, there will be congestion. How do city planners deal with these traffic issues? They build bigger roads with more lanes. A four, six, or eight-lane highway can handle a lot more than a two-lane highway.

Your bandwidth is like this—for both upload and download speeds. If everyone is using the internet at the same time and you don’t have enough bandwidth (or “lanes”), your speed will be as frustrating as rush hour traffic. The bandwidth needs of residential and business internet users are very different. Here’s how.

1. Upload Speed is Essential for Cloud Backup

These days, many businesses are making the smart move to back up their data on cloud-based servers. Even small businesses use Google Drive, Dropbox, and other cloud-based services to keep their data secure and always available. To keep that backup running, a high upload speed is absolutely essential. Most residential internet packages feature a much, much slower upload speed than download speed—a typical package is 20Mbps download and only 2Mpbs upload. This is because most home internet users are downloading, not uploading, on a regular basis, using video streaming and browsing the web. Businesses, on the other hand, maybe (and perhaps should be) running continual backups using their upload speed, and without the right package, these backups won’t work.

2. You Need a Static IP Addresses

If you’re hosting your company’s website and want it to resolve to a server, you’ll need what’s called a static IP address. Same for hosting your office infrastructures such as mail servers, heating, and A/C controls, security cameras, and more. For residential users, this isn’t even available: in fact, there are fewer static IP addresses available these days than there were ten years ago. A static IP address is a necessity for today’s businesses, and it’s part of what comes with a business internet service package.

3. Businesses Don’t Share Connectivity

A typical residential internet connection is shared in a neighborhood. An internet service provider can run cable or fiber into a neighborhood gateway and serve a block or two. For businesses, an ISP will run a dedicated, direct connection, meaning you won’t lose connectivity or experience slowdowns during peak usage times of the day. This is important for productivity and morale levels: no one wants to work harder just because they’re dealing with internet issues.

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