Overselling Hosts

October 13, 2008

The business model used by a lot of hosts these days is “price ‘em low, stack ‘em high”, hence the low prices. But with that comes the strong possibility that you may be placed on a server that is being crippled by overselling.

I’ll try and explain it in a way that is easy to understand, all of my figures are estimates so try and bear with me

I’d estimate that the average cost of a high end dedicated server will be costing the web host around $400 per month to run, and that’s not including the support costs, that’s simply the cost of the hardware and the cost of keeping the server online at the datacentre.

So if a web host charges a customer $5.95 per month for a hosting account, they need to fit roughly 68 customers on that server to meet the server costs each month. BUT….and this is where the overselling comes in – there is only so much disk space and bandwidth that you can have on 1 server.

Even with a massive 1TB – thats 1000GB, hardrive in the server, A host would only be able to fit 5 clients on that server IF they didn’t oversell.

This is based on the fact that web hosts provide each customer with on average, around 200GB of disk space, so 200GB * 5 customers would fill up the 1TB (1000GB) hard drive. So the income a hosting company would generate per server, IF they didn’t oversell, would only be $29.75 per month, which would be nowhere near enough to cover the $400 per month cost of running the server.

So it’s pretty obvious to all of us that lots of hosts out there DO oversell – But this isn’t actually a bad thing.

Just because a host oversells, it doesn’t mean they cripple their servers by putting too many users on each server, granted, some do but the majority handle overselling pretty well.

What the host does is put a simple little clause in their terms and conditions, stating that single clients must not use more than x% of CPU power or server resources at any one time. If a client reaches that amount, they will be asked to move onto a plan with more resources.

They also put clauses in there stating that the hosting must not be used purely for file download purposes, and must serve as an actual website. So if they ban you from running your own little file sharing network, then as you can image, it will be almost impossible to take up 200GB of disk space!

You need not worry about using up x% of the CPU either, this would only happen if you had an incredibly high traffic, resource intensive website. And lets face it, if you are getting that much traffic to your site you should be able to afford to spend more than $6 per month on hosting!

So with all that in mind, take a look at my list below and I show you which hosts are currently overselling – it’s quite a long list! All figures are correct at the time of writing and are based on the standard Linux hosting package offered by the host, if you find any errors, or would like to add another host to the list, please let me know! (Contact link at top of the page)

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