Explained: Residential vs. Business Broadband

fastest_broadband_internet_connection_in_cambridgeResidential Internet service providers (ISP) compared to business grade internet service providers. Here are some clear differences.

Residential products:

  1. Provision dynamic IP addresses (not static)
    • A dynamic IP means that the IP address will change without warning. Therefore you cannot easily and reliably use business features like monitoring, added security (VPN, Tunnels), RDP and public servers etc.
  2. Does not guarantee the speed of the connection, speeds are estimated. With cable, the aggregating connections are shared (not dedicated) between hundreds or thousands of customers in the same area. This means that when everyone is using the Internet and bandwidth usage spikes, everyone in your area is pulling bandwidth from the same aggregation pipe or port. You then begin to notice slower bandwidth speeds, latency and/or packet loss during peak area times (morning, noon, evening)
    • In some cases, residential Internet may see initial higher speeds than other residential areas. This is typically because there are fewer customers in that area at that time. However, as more customers are added and more people pull from the same connection aggregation link, expect the service level to be downgraded
  3. Does not offer SLA’s (Service level agreements)
    • Service Level Agreements are a providers guarantee that they will supply the service as stated, otherwise you have reason to leave or renegotiate terms, pricing. Residential ISP services, do not offer SLA’s because they cannot guarantee the connection will be reliable; it is best efforts
  4. Use lower grade hardware; routers not designed to sustain higher bandwidth throughput and speeds. Lower grade equipment like routers can cause failure or require regular rebooting
  5. Use bursting methods. When you initially test the speed is higher i.e. 100Mbps for the first few seconds, however as you continue to use the Internet connection, the speed slows down closer to 1Mbps. This is called policing and common practice of residential ISP’s
  6. Slower sending speed (Up), faster download (Down). However speeds do drop off as policing is engaged


Business products:

  1. Use static IP addresses
  2. Are dedicated (not shared) connections between your location and the Internet
    • This means, that a connection is dedicated to your business and carries a guaranteed speed commitment or SLA
  3. SLA’s (Service level agreements) are typically standard, demonstrating uptime, latency and packet loss being at a minimum
  4. Enterprise equipment; hardware costs more and is capable of sustaining more up time without rebooting
  5. Is a guaranteed, consistent dedicated up/down speed or link to the Internet, only limited by equipment, hardware or technical configurations
  6. Guaranteed sending/downloading (simultaneous) capacity

If you run a business or have a need for a reliable Internet connection, business grade products are the right fit for you. If you are at home, or have a small business with few staff, residential Internet products may be a better fit for you.