Overselling Just as bad as offering Unlimited disk space and bandwidth.

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Posted by Websellers, 11-14-2003, 06:41 PM
Hello, it has occurred to me that many web-hosting companies have been overselling, overselling is selling more then your server is capable of providing. Doing this they plan to make a large profit offering unrealistic costs for their services. Unlimited hosting is offering infinity disk space and bandwidth, which does not exist. Getting to my point they are both based on the assumption that their users will not use as much as the plan gives them, some will use more then others. Now think to your self is it not the same thing? Well thats my 2 cents, thank you for reading.
Posted by okihost, 11-14-2003, 07:00 PM
If resellers are going to offer allocated space and bandiwdth which they do not even have they are just as bad as the 'unlimited' hosts.. I am sure it can be done in a responsible way but I have seen too many horror stories off a reseller with 2GB of diskspace giving out 100GB of space and screwing all thier customers.
Posted by lastminutehosting, 11-14-2003, 08:09 PM
Well this has been discussed several times here and goes both ways. I think its clear to say unlmited is the worst of it all. Overselling is just about the same and allot of host do this. One day they will get burned but unfortunately the client is the one that suffers not the host. Overselling of any kind is taking it to the extreme IMO. It is best to have 10 servers making what you would make on 1 server but have your clients happy. One day it will all catch up to the host and the end users sad to say.
Posted by ozzie123, 11-14-2003, 08:52 PM
I think OVERSELLING is much worse than just unlimited bandwith or diskspace. Why? Because many hosting didn't say to the customer that they are overselling and this is bad (most of the hosting that do this even using a single intel processor...)
Posted by IHSL, 11-14-2003, 09:39 PM
Overselling is bad, but not as bad as "unlimited" allocations. Overselling has many forms; Overselling within Tier 1 limits: ok Overselling with no limits: not ok Overselling within tier 1 limits explained: Scenario;One of our resellers signs up for a 6 GB space/ 60 GB transfer accounts, and signs up 10 GB worth of space, and 100GB of transfer Solution; The reseller has stayed within his/her maximum limits, and therefore pays his/her overages, as per contract You'll find that many providers, like ourselves, disable overselling all together. The H-Sphere system has a neat tool, the allows us to specify the exact maximum that we will allow a reseller to allocate, and it's only allocated when he pays his overage fees. Overselling with no limits explained: Reseller advertises above and beyond his/her tier 1 limits Unlimited Allocations: Reseller offers unlimited disk space and transfer, which does not exist. Reseller is then open to claims of fraud by user and also by tier 1 provider.
Posted by Aussie Bob, 11-14-2003, 10:29 PM
Wow, this just occurred to you, hey? Better break the story to 60 Minutes.
Posted by Caldazar, 11-14-2003, 11:09 PM
Websellers - overselling is how the industry works. Overselling is not bad, so long as it is controlled carefully and plans are created with a sensible limit in which to allow overselling. If done correctly, hosts shouldn't come across any problems. Overselling happens not just with webhosting but also with most telecommunications products. Eg. Internet connections, Cellphone and Telephone networks etc. Try get everyone who owns a cellphone to make a phone call at the exact same time. Try to get everyone on your ISP to start downloading at full speed at the exact same time. What do you think will happen? Would you suggest everyone stops overselling? Haha, Bob - thats the funniest comment I've read all week
Posted by mrzippy, 11-14-2003, 11:44 PM
FREE HOT DOGS FOR EVERYONE! haha. I was driving home and I saw this advertised at a local furniture store. They are advertising free hotdogs to EVERYONE who walks into their store. This is a form of overselling. It is not possible to stock an unlimited supply of hotdogs. They are simply playing the game and "betting" that not everyone is going to visit their store and demand a free hotdog. Overselling is the same thing... the host company bets that not every customer is going to use up all their allocated resources. It can be a useful tool, but is very easy for the hosting company to get "carried away" with what they can offer and actually fulfil. Many hosts don't realize the risk involved with overselling and don't have a way to actually fullfill customer obligations if necessary. That is just dishonest and it is those companies that (hopefully) go out of business... (only to be replaced by two more, of course.)
Posted by IHSL, 11-14-2003, 11:51 PM
Very true. The only thing being; If that store runs out of hotdogs, there's no serious repurcussions.. Whereas in web hosting, overselling will ultimately lead to the websites on those servers going *poof* On a seperate, but related issue; your talk of hotdogs has made me hungry
Posted by cyberultra, 11-15-2003, 12:06 AM
Overselling is is not too bad, this is what I think, just handle carefully. If you have a server with 40GB HDD and 500GB Transfer, and all of the space and transfer are already been "allocated" (not used) to your users, but if you see that they are actually using 20++GB of space and only 300GB Transfer/month, why don't you oversell abit and offer a low price hosting to the others? Yes, of course you have good ethics if you don't willing to oversell because of your principle. But remember, THIS IS BUSINESS! Just make sure you can provide what you promise and you can make profits. No harm getting extra profits and having more happy customers at the same time right? Many hosts go out of business not because only they are overselling, it's because the're OVER-OVERSELLING, no planning and hope that their users sign up with them and leave the server empty.... IMHO, a better way is you still can earn without overselling, but you can earn a little more with overselling Last edited by cyberultra; 11-15-2003 at 12:13 AM.
Posted by IHSL, 11-15-2003, 12:12 AM
I can understand some people overselling a little on transfer, but not space. Overselling on space isn't business, it's stupid
Posted by cyberultra, 11-15-2003, 12:41 AM
I don't think so. Overselling with good planning -> ok Overselling without planning -> stupid If one day all of a sudden your customers use up all hdd space before you can notice and have no time to add more space, you shall say sorry to them and add more space ASAP! Ensure to provide them what you promise them, admit your mistakes when you meet failure. Anyway, this is only my personal opinion. Don't agree? It's ok
Posted by IHSL, 11-15-2003, 12:51 AM
True, opinions are like rear ends... everyone has one Ok, picture the scenario, so i can have you understand my opinion; It's christmas eve, all hardware suppliers are shut for 4 days, and suddenly you realise you allocated above and beyond your HDD can handle... what happens now? In the web hosting business, you literally have got to plan for the worst case scenario. As another thread stated a few days ago.. even down to the gruesome detail of what would happen to your customers if you died..or became unable to manage the company. etc etc Most customers won't accept "sorry, we gave the space you paid for to someone else", especially not clients who are running a business
Posted by cyberultra, 11-15-2003, 01:46 AM
Ok, just tell you what'll I suggest to do if those of your extremely low probability scenarios happen Move few dead sites from the server to another server which has quite some free space in order to free up space and have the HDD able to handle that. Remember to tell your customer this and their new IP address with reasons. If all your servers are fully utilized?!! Congrats since your business is very successful and go get another server, you will need it in no time. (Do all data centers close for 4 days during X'mas?) Yes, always have a partner or a employee who can take over your job whenever you are not available. A worst case that I have come up to and I can't think of any good solution: Down to the gruesome. Your office accidentally caught on fire during office hour, you and all your staff died.... Last edited by cyberultra; 11-15-2003 at 01:53 AM.
Posted by IHSL, 11-15-2003, 01:52 AM
DC's don't close, no. Neither do most companies (we had to dangle triple time in front of two support guys to take us up on the offer of working 9am-5pm on christmas day this year ) But, they will be under-staffed in comparison with other days, even if only for part of the day. Again, you're entitled to your opinion
Posted by Caldazar, 11-15-2003, 01:54 AM
Perhaps you should keep offsite backups?
Posted by IHSL, 11-15-2003, 01:58 AM
Of staff?
Posted by mindless, 11-15-2003, 02:06 AM
There is a difference Controlled Overselling Controlled Overselling is OK to do its how people make money. all you have to do is make sure you dont over sell to the point of no control then you will be in seriously trouble with space and bandwidth issues. most host over well their server by about 10% which is good to do to make money and also it can be fixed if all the customers use all of their limites since you can always add in extra hard drives. Uncontrolled Overselling Uncontrolled Over Selling is pretty much just like offering unlimited space and bandwidth. its where a hosting company will over sell there server and think of no way that they can control the problem if everyone uses what they where allocated
Posted by cyberultra, 11-15-2003, 02:09 AM
Of office
Posted by cyberultra, 11-15-2003, 02:09 AM
I like these terms, Controlled Overselling & Uncontrolled Overselling
Posted by JohnTight, 11-15-2003, 02:17 AM
What about companies that oversell just the bandwidth and not disc space? I run into a few of these
Posted by IHSL, 11-15-2003, 02:25 AM
Same applies really, although there's normally a little more leniency in this... If you sell (and use) more than your provider will allow you (in overages), then *poof* bye-bye accounts. hello suspension page
Posted by Caldazar, 11-15-2003, 02:57 AM
Yep, as soon as I've finished developing my staff redundancy system, I'll let you know. Due 2093
Posted by vitalis, 11-15-2003, 03:03 AM
So let's say the HD is full and I want to upgrade my account. How would you go about doing that? Do you create another account for me in another server and link it to my account?
Posted by Websellers, 11-15-2003, 03:13 AM
I dont see whats wrong with making good ethical decisions. It may be business but that does not mean you cant make money by being truthful to your clients and letting them have fully and exactly what they pay for.
Posted by ozzie123, 11-15-2003, 04:27 AM
I think (doing the rough calculations) web hosting companies still make profit if they are truthful to their customer. Courtesy is every thing. Once the customer knows that a webhosting company is doing overselling, that might be a bad sign for the webhosting. Oh, IHSL, I think overselling and unlimited bandwith is as bad as it can.
Posted by Website Rob, 11-15-2003, 11:49 AM
Bottom Line If Clients get the service(s) they paid for when they want it, where is the problem? The problem is with people running a Hosting business and do not properly manage it. If we apply the same logic and most definitions as mentioned in this thread (and many others of the same Subject), and subsitute "over selling" with "over spending", then nobody should use Credit Cards, have loans or borrow money at any time. Being in debt is a necessity in today's world and properly managed, is not a problem. A properly managed Server is not a problem either. Most people only see the obvious; Web space and/or Data Transfer. Believe me, there are many other areas of Server Management that, if not properly managed, will do a lot more harm. People who know how to properly manage a Server, know what has to be done. Clients of a properly managed Server don't know what has be done, but they know they enjoy the benefits.
Posted by CrazyTech, 11-15-2003, 12:21 PM
As others have already pointed out in this thread, overselling is perfectly fair provided it is done in the correct manner, which often it is not. It can be beneficial to the host in allowing more money per server and beneficial to the customer because it can help lower costs. Overselling transfer can safely and easily be done. Transfer is something that you always can get more of if need be (by paying overages). Diskspace, however, is a completely different situation. Overselling on diskspace is very, very dangerous and often will cause problems on down the road. Diskspace is not something that you can conveniently get more of as needed. Even if adding hard drives to the server, you're still cramming many accounts on the one server that results in the high loads and decreased performance. Unfortunately, many hosts have stepped way over the line in overselling. This has resulted in hundreds of accounts on one server. Problems like high server loads and like often occur and it's more of a problem for these hosts. The simple fact is overselling, if done to the extreme, can be just as bad as offering unlimited space/transfer. Either way, you're saying you offer something that you cannot.
Posted by JohnCrowley, 11-15-2003, 12:34 PM
We've been hosting since 1996, oversell both space and transfers responsibly, and have never told a client they cannot use what they paid for. If you plan ahead, calculate average space and transfer usage per account type, you can easily oversell both space and transfers, and *never* adversely affect a customer. If you find space being used more than expected, add another hard drive, move account(s) to another server, trim some logs, etc... If you properly manage and then monitor your servers, this becomes a non-issue. We have had to move a few clients in 7+ years, and have added a few had drives, but the majority of our servers have been fine from day one due to proper planning. We probably oversell by 10-20% on space and 400-500% on transfers (assuming a server can handle for example 200-300 GB without any adverse load issues). And in about 99% of all cases, we have not run into any problems, and in 100% of all cases, have never had to limit a client from using their allotted space or transfers. As mentioned many times before, this practice can be abused and can lead to problems, but with proper management and planning, can really help to increase profits. - John C.
Posted by cyberultra, 11-15-2003, 01:31 PM
400-500%!! Unbelievable! Anyway, a well planned overselling is good for both customers' site and yours But don't try it before you are confident enough, will burn your finger
Posted by MeirHosting, 11-15-2003, 02:09 PM
It only works with quality equipment. A celeron 1.7ghz can barely cope with full allocation nevermind taking into consideration overselling. We prohibit overselling to assist in providing a quality service and performance. Fair enough, we won't be earning as much profit per server as some hosts, but we see less turnover of clients, less admin tasks and less support tickets to deal with.
Posted by JohnCrowley, 11-15-2003, 04:13 PM
Just so there's no confusion, what I meant by that is if everyone used all of their bandwidth in their plan, we'd be averaging 400-500% above what we consider our limit for stable hosting on a single server. The reality is our average client uses around 10% of their bandwidth each month, which allows us to have more accounts per server and suffer no degradation of service. Our average shared server transfers 100-200 GB per month, even though the total bandwidth if everyone used 100% of their plan would be around 1000 GB. Note that the type of clients you host will drastically affect the amount of resources they consume. We target the business sector, which often uses very little resources but demands near 100% uptime and full email services. - John C.
Posted by Dacsoft, 11-15-2003, 07:58 PM
Overselling bandwidth might be related to how phone companies work, but overselling disk space is closer to the phone company giving multiple users the same number and hoping they don't try to use it at the same time. No matter how you look at it, overselling disk space is selling something you don't own - you have already sold (rented) it to somebody.
Posted by JohnCrowley, 11-15-2003, 08:37 PM
I would liken it to the phone company saying you can store up to 30 minutes of voicemails on their system. If everyone stored 30 minutes of voicemails, it would exceed the storage capacity of the voicemail system. But, with proper monitoring, the phone company can add extra storage space as needed, and also knows based on past experience and a detailed analysis of usage statistics what the expected max. usage will be at any given time. It is not selling something for nothing if it's managed correctly, as the client will never be denied the use of what was sold to them in the first place. - John C.
Posted by Aussie Bob, 11-15-2003, 09:10 PM
JohnCrowley's been in this business back when most hosts were in nappies. [ok, slight exaggeration there ] He knows what he's doing.
Posted by Dacsoft, 11-15-2003, 10:16 PM
This is one of those issues everybody needs to decide for themselves based on their setup and experience. With good monitoring and quick access to the servers, it is possible to never let overselling impact a customer. Larger companies can easily handle this situation, where smaller companies (like mine)who rely on servers in a remote DC are not able to quickly respond if a disk starts getting filled.
Posted by Xcel, 11-16-2003, 03:39 AM
Yea right! youv'e obviously never seen me run out of hotdogs. Believe me there are serious cosequences AND repurcussions!
Posted by IHSL, 11-16-2003, 03:44 AM
True, BBQ's at my home can get out of hand unless there's a non-stop stream of Dogs and Burgers, not to mention beer!!

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