Web Hosting - Overselling

[temi]

What is overselling?
Overselling, put simply, is a term used in the hosting industry where a company advertises plans that are unsustainable if every one of their clients was to use the full resources of the package.
For example, a host may have a server with 300GB of storage space and offer plans with 50GB of space each at £5 per month. As soon as 6 clients sign up for an account, all space on that server has been allocated, however the company can see that those clients are only using around 10GB in total.
Here’s where the overselling comes in.
It is pretty much a certainty that not every client will use the full resources allocated to their account. With only 6 clients using 10GB of storage space, the hosting company can carry on selling accounts until the server starts to show signs of becoming full.
Of course, there are other factors that need to be taken into account here and not just disk space. Each client will use other resources too, bandwidth and processor usage for example. It’s down to the hosting company to monitor their servers to make sure they can provide the level of service that was stated in the agreement.


So why would they do this?
Basically, it’s a marketing strategy, and a very good one. Everyone wants as much disk space and bandwidth as possible, while paying the lowest price – even if they have no intention of using hundreds of gigs of storage. Greed gets the better of people and seeing a plan with 100GB of disk space looks allot more appealing than one with 1GB.


Can I use all of this space?
Each hosting company has different terms and conditions that limit what you can do with your account. I have seen one company setting a limit of 1% processor usage per account, some companies disallow you from uploading certain file types, i.e no video, archive or video files are allowed. Therefore they are limiting you to just images and html – it’d take allot of images to fill the 500GB that some companies advertise, and even if you did get close they would probably hit you with the processor usage clause and terminate the account.


So overselling is a con?
If you are looking for somewhere to setup the next Facebook or YouTube, you’re out of luck. There’s virtually no chance of you being able to use your full quota and will be suspended before you get anywhere near your limit.
Overselling isn’t just used in the web hosting industry and is probably more common than you realise. For example, your telecommunications company probably has millions of customers, but if all of them were to make a call at the same time you would certainly have trouble getting through – something often seen at New Years Eve.
Having the resources to allow this would cost them a fortune, which they would have to pass onto their clients. Overselling not only keeps costs down for the end user, but also allows the hosting company to attract many more clients.
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A big thank you to Daniel Butcher, MD EZPZ Hosting for writing this article for UK WW.
If you will like to write an article for UK WW, please use the contact form or send a PM to Temi

[camp185]

Saw your blog post about this. Tons of companies do this, even the big ones like Netflix or Blockbuster. Those two particular companies don't make money on clients that rent 15+ movies a month through the mail in service. They only make money on the once and a while renters.

[temi]

This show they have a flawed business model, some companies over compete on price not leaving a decent merging for profit hence end up in all kinds of financial difficulties.

[Gorkfu]

Those two particular companies don't make money on clients that rent 15+ movies a month through the mail in service. They only make money on the once and a while renters.

Yea they don't make any money off me!

This show they have a flawed business model

I don't think it's flawed, at least not until some other competition starts to hurt them.

[SoulTech]

Originally Posted by Gorkfu

Yea they don't make any money off me!



I don't think it's flawed, at least not until some other competition starts to hurt them.

well said.

[Vilice]

first of all, you need to know whether the domain is blacklisted by famous search engine. else you will wasting your money buying this.
I would think it would be more about the topic or topics than the member count. (Not that the member count is insignificant, but a high member count it more a brute force way to get message board to gain you income.)

[DanielEZPZ]

Why are none of your posts making any sense?

[Midwest]

Originally Posted by DanielEZPZ

Why are none of your posts making any sense?

If you were talking about Vilice's posts, then I was wondering the same..

[[Tsohost] Darren]

Just remember: your bank is overselling quite considerably. (It only holds in reserve a small fraction of the money deposited)

This works fine for 99.99% of people who are usually able to withdraw all the money they need at short notice without a problem.

[temi]

Not quite sure the bank over selling and web hosting companies over selling are good comparison.
When hosting company oversell customers pay for it in slow access time to your site which could be fatal to your business.

When banks oversell, they just borrow more money from other banks or bank of England.

Originally Posted by [Tsohost] Darren

Just remember: your bank is overselling quite considerably. (It only holds in reserve a small fraction of the money deposited)

This works fine for 99.99% of people who are usually able to withdraw all the money they need at short notice without a problem.