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All about overselling
Overselling is a well known marketing trick that most web hosting companies are using to sell more hosting accounts. It basically means to sell beyond the limits of delivery. In other words - selling something they don't have. Let's have an example:
A web hosting company has a server with 300GB hard drive and 3000GB of available monthly bandwidth. They start to sell hosting packages including 10GB of disk space and 100GB of monthly bandwidth. All this for let's say $4.95/mo. This is obvious overselling, and here is why. By the time they have sold 30 packages, the total amount of sold disk space will be 30x10GB=300GB. That's when the server should be full and no more accounts should be created. It's all the same for bandwidth too - 30 accounts, 100GB each equals 3000GB. But what happens - they note that the total disk space usage on the server is barely 50GB, since noone is actually using all the disk space that has been purchased, so they decide to host more accounts on the server. They let another 30 accounts, which are pure profit, since they will use a resource that has been already sold. What happens then - 60 accounts on the server, still only 100GB disk space used. So step by step this server will get probably 180 accounts until it actually gets full. And all this is by simply hoping that no one will decide to use all of the disk space or bandwidth they have purchased. Calculations are easy - 180 accounts, 10GB each is 1800GBs. Since there are no such harddrives created yet, imagine what will happen if all users decide to use all of their disk space purchased instead of using just a small amount.
Since the cost of the server remains the same for the hosting company, all accounts after the 30th are pure 100% profit. The problem will arise when customers decide to use more resources that usual. This will result in slow website loading speeds, insufficient disk space. The only way to solve this would be adding additional hard drives to the server and probably additional network interfaces to handle the bandwidth. However, the server core remains the same, so loads will be higher than usual. For example database access will be slow, same for script executions.
The only upside of overselling is that it helps keep prices low. It is good for customers, unless they are serious with their business plans. When you decide to host a serious business website and not simply a blog, you need to make sure that you can consume 100% of what you're paying for. This is when you need to make sure that the web hosting company you're signing up for is not overselling their resources. Pricing may seem a bit higher than others, but at least now you know why.
Overselling is healthy for web hosting companies, but when done responsibly with careful planning. Unfortunatelly these days many hosting companies are abusing this technique by offering ridiculous amounts of disk space and bandwidth for a very small price. Since most customers don't try to think why this is done and the only thing they are looking at is the price, the rest of the web hosting companies become less competitive, despite the fact that they are actually the loyal ones.
Even worse, there are companies that offer "unlimited" bandwidth and the unimaginable unlimited disk space, which is something I believe we all know is not possible. Everything has a limit.
When planning how many accounts to put on a server the hosting company takes into consideration the processing power of the machine. This is an aspect that is also often oversold. There's a lot of difference between a server that is hosting regular html sites and a server hosting dynamic forums and other database applications.
Since the majority of web hosting companies are not telling whether they are overselling or not, you have to figure this out on your own. No one would admit that he is selling something he doesn't have, but simple calculations will tell the truth. Just spend a minute on the figures. There are only a few hosts that proudly say that they are not overselling. This is a significant advantage that can be used as a marketing upside and is potentially even more powerful than silent overselling while keeping the price low.
So, when searching for a web hosting company, check for their overselling policy. Non-overselling hosts are the ones that are more reliable and you don't have to worry what's happening inside the company.
Overselling is a well known marketing trick that most web hosting companies are using to sell more hosting accounts. It basically means to sell beyond the limits of delivery. In other words - selling something they don't have. Let's have an example:
A web hosting company has a server with 300GB hard drive and 3000GB of available monthly bandwidth. They start to sell hosting packages including 10GB of disk space and 100GB of monthly bandwidth. All this for let's say $4.95/mo. This is obvious overselling, and here is why. By the time they have sold 30 packages, the total amount of sold disk space will be 30x10GB=300GB. That's when the server should be full and no more accounts should be created. It's all the same for bandwidth too - 30 accounts, 100GB each equals 3000GB. But what happens - they note that the total disk space usage on the server is barely 50GB, since noone is actually using all the disk space that has been purchased, so they decide to host more accounts on the server. They let another 30 accounts, which are pure profit, since they will use a resource that has been already sold. What happens then - 60 accounts on the server, still only 100GB disk space used. So step by step this server will get probably 180 accounts until it actually gets full. And all this is by simply hoping that no one will decide to use all of the disk space or bandwidth they have purchased. Calculations are easy - 180 accounts, 10GB each is 1800GBs. Since there are no such harddrives created yet, imagine what will happen if all users decide to use all of their disk space purchased instead of using just a small amount.
Since the cost of the server remains the same for the hosting company, all accounts after the 30th are pure 100% profit. The problem will arise when customers decide to use more resources that usual. This will result in slow website loading speeds, insufficient disk space. The only way to solve this would be adding additional hard drives to the server and probably additional network interfaces to handle the bandwidth. However, the server core remains the same, so loads will be higher than usual. For example database access will be slow, same for script executions.
The only upside of overselling is that it helps keep prices low. It is good for customers, unless they are serious with their business plans. When you decide to host a serious business website and not simply a blog, you need to make sure that you can consume 100% of what you're paying for. This is when you need to make sure that the web hosting company you're signing up for is not overselling their resources. Pricing may seem a bit higher than others, but at least now you know why.
Overselling is healthy for web hosting companies, but when done responsibly with careful planning. Unfortunatelly these days many hosting companies are abusing this technique by offering ridiculous amounts of disk space and bandwidth for a very small price. Since most customers don't try to think why this is done and the only thing they are looking at is the price, the rest of the web hosting companies become less competitive, despite the fact that they are actually the loyal ones.
Even worse, there are companies that offer "unlimited" bandwidth and the unimaginable unlimited disk space, which is something I believe we all know is not possible. Everything has a limit.
When planning how many accounts to put on a server the hosting company takes into consideration the processing power of the machine. This is an aspect that is also often oversold. There's a lot of difference between a server that is hosting regular html sites and a server hosting dynamic forums and other database applications.
Since the majority of web hosting companies are not telling whether they are overselling or not, you have to figure this out on your own. No one would admit that he is selling something he doesn't have, but simple calculations will tell the truth. Just spend a minute on the figures. There are only a few hosts that proudly say that they are not overselling. This is a significant advantage that can be used as a marketing upside and is potentially even more powerful than silent overselling while keeping the price low.
So, when searching for a web hosting company, check for their overselling policy. Non-overselling hosts are the ones that are more reliable and you don't have to worry what's happening inside the company.
