Overselling in Web Hosting Industry: Good or Bad?

Posted on November 25, 2011 by
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Overselling is a common practice in the service industry, for example, some Airlines oversell the available seats because statistically, a few percent of passengers won’t attend the flight, some postpone or cancel the flight, while others may simply miss it. Web hosting businesses as service providers are no exception; they may oversell their available resources to maximize utilization and financial return. Web hosts can get some extra money by overselling their CPU time, bandwidth, storage and memory. If performed carefully, responsibly and correctly, overselling can be an invaluable method that enhances the success of a web hosting. However, poorly executed overselling can lead to the demise of web host.

Overselling actually has its root, in the early era of the World Wide Web, when websites are consisted only of HTML codes, low resolution images and the multimedia is consisted only of simple tunes. In that time, a 10Mb of space was considered more than enough for setting up a medium-sized website and web hosts offered fixed resources to clients. However, during the 2000s, storage cost declined significantly and the content technology went even farther. In addition, improvement in data transfer technology, bandwidth also became cheap and abundant. Then by the end of 2010s, things get really wild as web hosts started to offer phenomenal amount of storage (some might go beyond 100GB) at low price. Some experts believed that this practice only encourage unethical overselling. On the other hand, plain HTML pages has been supplemented or replaced by JSP, ASP, PHP, Phyton and Ruby to name a few. Modern websites also use large sized contents such as high resolution images and videos. Unfortunately, only a few web hosts acted accordingly to cater increased demands and many failed to do so and this prompted them to oversell just to satisfy users’ demands.

To better compete in the today’s environment, web hosts do need to oversell their resource. A host that doesn’t oversell may waste money because many clients don’t come close in using the allotted disk space and storage. Some web hosts can even safely oversell their resources by more than 200 percent without degrading performance and quality of service. For example, a web host may oversell a 1TB server into hosting plans that equal to 2TB of storage, by assuming that the average resource utilization rate for each client is 50 percent. There are two ways web hosts oversell their services:

  1. By fitting more clients in a machine
  2. By selling plans that are more than the available resources (storage and bandwidth)

This is the reasons why some webhosts are selling an absurd amount of resources for an ridiculously low price, for example, you may only need to pay $10 per month for 100GB of storage and 4TB of data transfer. At this price level, the company may oversell their services 10 times (1000 percent) than what safely can be done. Consequently, they may need to stuff thousands of clients in a single server, which is ill equipped to handle such load.  This will lead to script failure, slow page loads, more frequent downtimes and others. Unfortunately, server overload isn’t only caused improper overselling as in some cases; malfunctioning or crappy scripts can cause the CPU to reach the threshold limit. On websites which depend on dynamic scripts for various backend processing, script malfunctions can be shattering to the performance. In some cases, more than half of the scripts are not written properly. The problem may be caused primarily developers or coders, because bad scripts aren’t limited to personal blogs and smaller websites, many big, reputable websites are found to have malfunctioning scripts.

It’s important for clients to avoid web hosts that oversell excessively, because often their websites are suspended before reaching the allotted resources limitation. It is often difficult to appeal for the suspension, because the web host will simply cite a small print that says something like, “the hosting company has the right to immediately suspend the account if the client is suspected for resource abuse” and worse, no refund will be offered.

Overselling can actually help users in the end as they can have a lower price, however, poorly planned overselling can be detrimental to users due to slow load times, higher downtimes, repeated server failures and others. Just like with many things in life, you get what you pay for. Today, it’s quite rare to find web host that doesn’t oversell as most of them oversell to varying degrees. Some web hosts actually rely on the overselling to keep them in business as it allows them to make the best use of their limited resources.

Opinions that overselling is bad are usually propaganda spread by web hosts that haven’t adopted the method. These web hosts believe that overselling may cause unexpected purchase of physical servers due to spikes in demands. So if the web hosts have spent a lot of money for the current infrastructure, adopting overselling strategy can be costly in the long run as they no longer have enough resources to share.

Often, those who didn’t have the guts in the hyper-competitive market die down eventually. Web hosts that only offer traditional plans such as shared and managed hosting plans may go down the drain. Users should be aware that over-sellers are not necessarily cheaters. In fact, it is beneficial to choose honest over-sellers, as they can often provide plenty of resources at relatively affordable monthly fees.

About: This Article was Contributed by Raja. He is a Web Hosting industry watcher and writes regularly on Dedicated Hosting Reviews and Reseller Hosting Reviews.

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