Overselling is a marketing gimmick which many hosting companies use, where you are promised far more resources than the hosting company has available, designed to entice clients to their servers. For example, unlimited amounts of disk space and bandwidth for very low prices are the hallmark of these providers. If you’ve been looking for a hosting plan recently, you’ve likely seen the various advertisements and offers promising "Only $6.95 per month! With Unlimited storage, Unlimited bandwidth, Host Unlimited Domains!"Or from another popular hosting company: "150GB space, unlimited websites and bandwidth". This is overselling in its finest.
Anatomy of the Oversell
Let's look at an example: A hosting provider rents a dedicated server with 4GB RAM, 500GB HDD and 2TB monthly bandwidth, which costs $200 per month. Now this hosting company is selling hosting packages for $7.95 with 150 GB disk space and unlimited bandwidth (which by the way, is nowhere near the extreme for many hosting plans). Those who understand basic math immediately recognize that if the host allows only three users to use the resources he or she has purchased, the hosting provider would have used almost his entire hard disk and would have exceeded their monthly bandwidth on the server, with only three clients paying $7.95 a month, for a total of $23.85. So, what do these providers do? They have to pack as many customers on that server (often up to 1000 or more are on a single server) hoping that clients never actually use the resources they've purchased.
How overselling impacts your hosting experience?
Account Suspension/Termination: A host that oversells counts on you never using the resources which you paid for. However, your business depends on reliable service, and you don't want to run the risk of having your web site shut down all of a sudden. If you run a blog, forum or online store, you'll likely see a significant increase in your traffic if you advertise, or you’re in-store clients begin visiting your web site. The companies who oversell have numerous restrictions in place, where if you reach any of those restrictions you run the risk of your hosting provider enforcing their restrictions, often times suspending or terminating your account. When your account is suspended or terminated, 1) visitors can no longer access your account, and 2) you lose your entire site, unless you have recent backups. Your web site is your business on the internet, and this would be similar to your physical business location being shut down all of a sudden.
Frequent migrations: The more popular your site gets, the more your hosting provider will push you to get either a VPS (Virtual Private Server) or a Dedicated Server, which can get pricey for many small businesses. Or, as has happened too many, the host may migrate your web site to a less used server, which requires you to change the nameservers on your domain name, which can take up to 72 hours to make all the changes across the internet, essentially putting your online business OUT OF BUSINESS for a period of time.
Slow Site Performance: As mentioned above, with often hundreds, or even thousands of sites competing with you for valuable resources you may see a very noticeable degradation of service. Let's look at it this way: you have 10 homes all receiving their water from a garden hose. If you are the only one using the water, you have really good water pressure, but if your neighbor turns on their water, your water pressure is cut in half, if another neighbor turns on their water, you are cut in half again, and so on and so on, until you are down to a trickle or only a drip of water. The fact is, the more web sites that are hosted on a single server, the greater the decrease in site performance, and a decrease in site performance can mean a loss of business.
Exposure to malicious users: Cheap hosting, especially those with cheap packages offering everything, are very attractive to spammers and other users with less than admirable intentions. They can get in on the cheap, and run their scripts run without any accountability. Most hosting providers monitor for sites like these, but it's not fool proof, and even if a spammer can run for only a couple of days, they've done what they wanted CHEAPLY, while impacting your business, because the IP (Internet Protocol) address for that server could get listed in the spam directories, which means that legitimate emails from your business may get flagged as spam by the spam directories.
What can you do?
First and foremost, if you are running a business website, avoid the cheap offers promising you everything under the sun. Keep in mind that in the web hosting industry, more isn't really better, but could be opening you up to a whole big mess.
Look for a company that states that they DON'T oversell their server resources. Hosting your business web site with a hosting provider who doesn't oversell gives your business a greater chance of not being shut down, and a greater chance of not seeing a degradation of service.
When you get a web hosting account, take a look at the server stats, or even ask the provider prior to signing up. At Obsidian Moon Hosting we'll tell you our server stats upfront. We aren't afraid to tell you what our server load is, and we're proud to say that our average has been less than 1. What the server load means is how may processes are waiting in the queue to access the processor(s). The smaller the number, the better.
The next thing to look at is the amount of memory used. Just as with a computer, the higher the memory used the more potential problems that you're going to see. We've encountered web hosting companies who run servers at 98% or greater memory usage. Again, the lower the number, the better. At the time of writing, Obsidian Moon Hosting's server is running at 13%.