Saw this on a website just now, related to overselling. So I'm guessing at approximately 1200G monthly transfer, you better start worrying.

Actually, you touched on a very interesting subject that I was pondering about for the last few days - managing overselling.

Obviously, some companies do not oversell. But a lot of companies do. Doing so allows for higher profit margins. However, my questions is - do the unwritten rules of overselling exist?

For example, there has got to be some ratios accepted within the industry to what resources you sell versus what resources you physically have. For example, you might have a server with 4 GB RAM that you sell 12 GB RAM on... So a ratio would be 3 to 1. Same goes for bandwidth and disk space.

There is no standards, the hosts decided who is using up too much and kick them off the server and tell them to get a VPS or dedicated, does this sounds familiar to you?

Abe, that is not exactly what I was interested in.

I am more fascinated with the actual web host provider who oversells his resources according to a specified "ratio/formula". I will try to explain better. Assume ABC Hosting purchased a new server with 4 GB of RAM to sell VPS hosting. They sold 20 VPS packages, each with 256 MB of RAM. It means that ABC Hosting sold 5 GB of RAM while having only 4 GB of physical RAM. The overselling ratio for them is 25%.

If ABC Hosting were to sell 20 VPS plans with 512 MB of RAM each, they would have sold 10 GB of RAM on a 4 GB RAM server, which means their oversold by 150%.

Clearly, any web hosting provider has to be ready to deliver the resources they sold, but the reality is that most customers do not use, or never will use, the allocated resources they buy. So what I am curious about is if there is a safe overselling percentage that can allow any hosting provider to successfully sustain and grow its business.

Now you are talking about VPS, which as you know has physical limits.

VPS Servers act very different than regular shared hosting servers. Many VPS providers have what they call BURST RAM - so you're guaranteed a certain amount (say 256MB) and then you have a BURST of up to 1GB. What they're saying in those cases is that they only have to provide you with 256MB of memory, but if the machine has available UNUSED memory, then at the servers discression it may give you more memory to use on your site.

Not the best way of operating as really you're banking on the user not needing additional memory, and even if they don't - you don't have to give it to them. Sounds pretty awful huh?

We run on a guaranteed ONLY system ourselves. If you purchase 256MB, there will be 256MB available at all times. If you purchase 1GB there'll be a maximum of 1GB available - no burst, no oversell nothing. This means that you can then take a 16GB machine, put 16 VPS's on there and you're still not overselling (depending on CPU allocation etc). We generally only have 4 or 8 VPS nodes on each VPS machine ourselves.

With a VPS it's just like a dedicated server in many ways. If you say that the machine has 2GB available on it, it better have 2GB available or you'll have an angry admin on your hands with scripts that are not performing correctly.

There's no overselling formula (as an official statement - that I'm aware of) - each host makes up their own rules about how they see overselling, server utilization etc etc.

What can be excessive usage with one host, may not be excessive with another. It greatly depends on the hardware the host is using, and how they manage the machine to begin with. A host with a Celeron server and 1GB of memory will scream ABUSE much quicker than a host with a Quad Core Xeon with 8GB of memory. But day in and day out, we see small hosts trying to cram a handful of accounts on a grossly underpowered machine and then scrath their head in wonder as to why the machine is always running slow and users complain.

Good sharing handsonhosting !
Thank you so much

I disagree. It's widely known that burst memory isn't guaranteed, and you should never rely on it. To offer more burst than you can actually provide isn't actually overselling, it's only considered overselling if you were to guarantee more than you can technically provide everyone simultaneously.

Back to Artashes: As mentioned, there's not a standard ratio generally accepted or used & it really comes down to how it's managed the actual customers.

We're splitting hairs here. To me, anytime you offer ANYTHING that you can't actually provide - equates to overselling. You're right though, siforek - the amount of burst memory that's available for YOUR use at any point in time isn't guaranteed.

I'm not aware of any industry standards for accepted ratios, Artashes. This is why I like the approach of providers who tell you upfront (managing their prospects expectations) how many accounts they put on a server and give you specs.

I'd agree with that. Of course, a bit of overselling (i.e. controlled/managed overselling to sell towards full capacity, thus increasing a host's revenue) is fine. But yeah, I'd agree with that.

Actually, when you get to that stage it is outright lying. The same as offering unlimited resources.

Overselling to me is when you offer services that you can meet on demand but exceed the resources of the server.

If a server is so full that you cannot meet a burst RAM amount at any time then you are lying.

An 8GR RAM server can run at $900 with SoftLayer (I just checked their server page randomly).

That means should you offer a VPS plan with 256-512 MB RAM with up to 1 GB burstable RAM on each plan, you cannot sell more than 8 accounts. With extra added features and panels, IPs, etc, you have to charge $110+ per month per plan just to cover the costs. Obviously, between your $110+/month plan and competitor's $30-40/month plan, you might find yourself bored with no clients soon enough.

Where do the profits come from then?

Hence the physical limitation, ratio is 1:1 based on resources, if you sell a 8GB VPS server or 2 4GB, if you use a marketing term "burst" to sell VPS then you are overselling.

That seems high. I just did a brief search on some of our members here and elsewhere and came up with a number of offers under $450/month.

Thats a pretty arbitrary number though Art.

Look at the reality.
8gb ram plus a server with a high end CPU really only costs a high volume provider 4 or 5 hundred dollars. Add on the pipe from the data center and it wouldn't take long at a couple hundred dollars a month to recover costs.
If I were to see a host charging $900/month for this set up I would stay far away.