The Core Pricing Difference
Traditional committed bandwidth locks you into a fixed monthly rate for a specific tier regardless of utilization. Internet-on-Demand (IoD) NaaS charges an hourly rate for whatever tier your circuit is ordered at — and lets you change that tier in minutes.
On paper, the per-hour rate for IoD at full capacity is often higher than the equivalent committed bandwidth rate. The savings come entirely from the hours you spend at lower tiers. If your circuit runs at full capacity 24/7, IoD will cost more. If your utilization has any predictable off-peak pattern, IoD with active scheduling is almost always cheaper.
A 12-Month Cost Comparison
Assume a 1 Gbps circuit. A traditional committed contract might run $1,800/month flat. An IoD circuit at 1 Gbps might run $3.00/hour — $2,160/month at constant full capacity.
Now add scheduling: drop to 200 Mbps ($0.60/hr) for 14 hours per day on weekdays and all weekend. That works out to approximately:
- • On-peak hours: 10 hrs/day × 5 days × 52 weeks = 2,600 hrs × $3.00 = $7,800/year
- • Off-peak hours (weekdays): 14 hrs/day × 5 days × 52 weeks = 3,640 hrs × $0.60 = $2,184/year
- • Weekend hours: 48 hrs/week × 52 weeks = 2,496 hrs × $0.60 = $1,498/year
- • **Total IoD with scheduling: ~$11,482/year ($957/month)**
- • **Traditional committed: $21,600/year ($1,800/month)**
That is a 47% reduction — from scheduling alone, before any other optimization.
What the TCO Model Actually Includes
A real TCO comparison goes beyond the circuit line item:
- • **Portal management time:** Traditional bandwidth requires a provisioning ticket for every tier change. At 2–3 hours of engineer time per change, even quarterly adjustments add up to $5,000+ in annual labor at typical NOC rates.
- • **Stranded capacity:** Committed bandwidth you paid for but did not use has a real cost. IoD eliminates stranded capacity by definition.
- • **Flexibility value:** IoD allows burst capacity for one-time events without a contract amendment. Traditional bandwidth requires weeks of lead time and often a new term commitment.
- • **Scheduling software cost:** Add $600–$1,200/year for an IoD scheduler like Apptifi. Even with this cost, the net savings are significant.
When Traditional Bandwidth Wins
IoD is not always the right answer. Traditional committed bandwidth makes more sense when:
- • Your circuit runs at near-full capacity around the clock with no predictable off-peak pattern
- • Your provider does not offer IoD on the circuit locations you need
- • Your workload requires guaranteed bandwidth SLAs that IoD contracts do not provide
- • Contract terms lock you into a rate that is materially below current IoD pricing
Building Your Own TCO Model
The Apptifi savings calculator on the homepage provides a simplified starting point: enter your current monthly IoD spend and estimated peak hours per day, and it projects monthly and annual savings. For a full TCO model, add labor costs for manual tier changes, stranded capacity costs, and any contract termination fees from your existing committed bandwidth agreements.
The 36-month view often tells the most compelling story — the cumulative difference between committed bandwidth and optimized IoD frequently exceeds $50,000 for a single high-bandwidth circuit.