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Truth in Hosting... To Oversell or Not to Oversell?

by ViUX on 7/20/2009 12:22 AM

Truth in Hosting... ViUX® has a strict NO OVERSELLING policyHave you noticed that most Hosting Providers (big and small) offer incredible amounts of resources for less than $5 per month? Shared Hosting plans featuring over 100 GB of Diskspace, in excess of 1000 GB of Bandwidth, and well beyond 1000 E-mail Accounts (Mailboxes)… all for only a few dollars per month has become common in the Hosting Industry.

Web Hosts are well familiar with human nature, in that if you see “Hosting Provider (A)” offering: 1 GB of Diskspace; 10 GB of Bandwidth; and 10 E-mail Accounts – for $5 per month… and “Hosting Provider (B)” offering 100 times these amounts at: 100 GB of Diskspace; 1000 GB of Bandwidth; and 1000 E-mail Accounts – also for only $5 per month… that excluding other considerations you are far more likely to select “Hosting Provider (B)”.

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However before making what would seem to be such a simple choice, there are many other things that should be considered. The means by which Hosting Providers are able to offer such large resource quantities is called “Overselling”. There is no way that “Hosting Provider (B)”, in the above example, would be able to make a profit by giving each customer 100 GB of dedicated / reserved Diskspace. Instead, they sell the same Diskspace to countless customers over and over again, in hopes that most of them will never come anywhere close to using the full promised (sold) resource amounts.

In fact, if you carefully read the Terms of Service (TOS) and/or Acceptable Use Policy (AUP) of a Hosting Provider that offers such large resource quantities, you will almost certainly find something therein that severely limits the apparently otherwise “UNLIMITED” resources of their plans. Most often these unseen limits will take the form of some sort of: [Throttling], [Rate of Growth Restrictions], [Percentage of Usage Restrictions], or outright [Denial of Service]. In other words, if you actually try to make use of the promised resources to the full, you will likely find that you are suddenly prevented from doing so in some subtle manner related to a TOS / AUP violation, or by means of Throttling or Growth Rate Restrictions of some sort.

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Using Diskspace as an example… through overselling, a server that may have only 500 GB of total Diskspace, might have several hundred customers sharing the server, each of whom having been promised large amounts of Diskspace that together far exceed the server’s actual storage capacity. Many Hosting Providers have taken to overselling their server and network resources by 100 to well over 1000 times their actual available capacity. This creates high profits for the Web Host by drawing in unsuspecting customers that are sold by the large resource quantities; and by overselling the resources to those same customers. They also save money by not having to purchase as many servers or network bandwidth as would be needed if they did not oversell.

On the face of it, this may seem like just good business policy, in fact, many in the Hosting Industry argue that to not oversell is actually a waste of valuable server and network resources that would otherwise go unused. This being the case, most often the discussion within the Hosting Industry about overselling drifts away from "to oversell or not to oversell"… and into a discussion of "what level of overselling is ok". For instance, some may believe that it is fine to oversell to a factor of 2 to 10 times, but not 11 to 20; whereas still others may see nothing wrong with overselling to a factor of 100 times or more.

So what is the downside of overselling for the customer? Well, it is hard enough to provide guaranteed resource levels and Quality of Service (QoS), such as: CPU, Memory, Diskspace, and Bandwidth for Shared Hosting when overselling is not taking place. When you add overselling to that equation, it becomes virtually impossible to provide any sort of guaranteed resource levels or QoS, because you can never be certain when one or more of the Websites Hosted on the server will attempt to use the oversold resources that they have been promised. So as the overselling Web Host, you are left with the option of permitting the use, thus causing performance and related issues for the other customers on the server, or Throttling / Denying the use, thus preventing the customer from obtaining the resources they have been promised.

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In our past ViUX® has certainly felt pressure to adopt the practice of overselling, like that of our competition. However now that we make use of a completely Virtualized Hosting Infrastructure, we are able to more effectively manage our server and network resources, thus preventing waste of those resources – without the need for overselling.

We find the practice of overselling to be both dishonest, in that it sells the same resource to multiple customers; and disrespectful, as it seeks to appeal to human nature (bigger is better) over providing a fair cost basis for a reasonable amount of included resources.

For instance, while it is certainly nice to think that you are getting something like: 100 GB of Diskspace; 1000 GB of Bandwidth; and 1000 E-mail Accounts - all for less than $5 per month... do you REALLY need 1000 E-mail Accounts!?! Are there even 1000 people in your company? And if there are, how wise would it be for you to trust the business critical E-mail communications of 1000 people to a sub $5 Shared Hosting account?

Most people will not need more than: 1 to 10 GB of Diskspace; 10 to 100 GB of Bandwidth; and 10 E-mail Accounts. If you find that you need more resources than these, then you most likely should NOT be on a Shared Hosting account anyway! As your needs would be FAR better served by a Virtual Private Server (VPS) or Dedicated Server. For more information on selecting the right type of Web Hosting service to meet your needs, see our recent blog posting entitled: "Is your business critical Website using the ideal type of Hosting service?"

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Because of how we feel about the practice, and because our state-of-the-Internet Virtualized Cloud Hosting Infrastructure avoids wasted resources that would otherwise benefit from a small degree of overselling, ViUX® has adopted a strict "NO OVERSELLING" Policy. This being the case, you will not see any ViUX Hosting plans offering: 100 GB of Diskspace; 1000 GB of Bandwidth; and 1000 E-mail Accounts... all for less than $5 per month. We are certainly aware that this will mean that some customers will select "Hosting Provider (B)", in the example above, instead of selecting ViUX® as represented by "Hosting Provider (A)". However we know customers that have educated themselves to the practice of overselling will see the value in our Web Hosting services as structured and will appreciate our honesty and respect.

So our advice to you as a customer looking for Web Hosting services is to not be impressed by large resource numbers. If you must or feel compelled to select a Web Host that engages in the practice of overselling, then do yourself the benefit of researching to at least find out how many times over they resell each server and their network as a whole. As already stated, in our opinion, overselling is dishonest and disrespectful as a whole; however anything above the range of 2 to 5 times is downright reckless.

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