How would you define "overselling" and "underselling"?







fastreplies

Overselling would be selling more space/bandwidth than your server has if all (or enough) of your customers used the maximum they've bought.

Simple example: You have 100 GB of space to sell. You sell 5GB each to 25 people. If all 25 people try to use their full 5GB it adds up to 125GB and your server falls 25GB short.

However most people will never approach that 5GB, they probably won't even approach 1GB each.

It would be one example, but what about for example host offers 1000 mailboxes?
How do you educate Joe Public to recognize oversell in this situation? What signs he should look for?

Hopefully Joe reads this tread and learn something.



fastreplies

I think that those terms are totaly the same and mean doing money from air.

I don't thinks so.
If company made you a reasonable options wise offer but charge only $1.00 per month,
way below the cost, then you can't call it overselling. Can you?





fastreplies

Not exactly, but if you are doing cheap prices people will look for something hidden. I think that every web hosting package must feel the market

You said : "something hidden"

Well, what would it be? Can you provide some examples?





fastreplies

Originally Posted by fastreplies

I don't thinks so.
If company made you a reasonable options wise offer but charge only $1.00 per month,
way below the cost, then you can't call it overselling. Can you?





fastreplies

I will call it stupidity. Or may be charity?

Originally Posted by alemcherry

I will call it stupidity. Or may be charity?

Why don’t you read what the topic says and contribute something more substancial
than blah, blah, blah?



fastreplies

Underselling ... hm ... I have never met this term before. Overselling yes, it's clear. But that one ...

Originally Posted by annylurk

Underselling ... hm ... I have never met this term before. Overselling yes, it's clear. But that one ...

What would you call when idiotic WHC who will host 10 or 20 domains and unlimited amount of sub-domains for .99cents?

Don't they understand that client with 20 domains will happily pay 99cents for each domain if that moron host (and others alike) charge for each domain and get paid 20x99=19.80?


fastreplies

Not each customer will happy

Overselling is selling more resources than you are actually able to provide
Underselling is selling your less resources than you are able to provide.

Both have advantages/disadvantages.

Can anyone define "underselling" and/or send me in the direction of an underselling host. I think if you undersell, it just makes your business model non-viable, so who undersells?

Originally Posted by zappanet

Can anyone define "underselling" and/or send me in the direction of an underselling host. I think if you undersell, it just makes your business model non-viable, so who undersells?

Nearly every ISP for start.
How do you think that they keep adding bandwidth for their customer without opening the roads all the time ?
It's because an ISP buys a portion of bandwidth on the backbones, and it undersell it to allow it to grow bigger with time.
They don't provide 100% of their bandwidth, but usually around 45~50%, keeping room for the future and peaks.

What tripy said.

Underselling is the provisioning of less than the maximum amount of resource available to customers, in order to allow for spikes and peaks. Some hosts do still do this.

Overselling is the provisioning of more than the maximum amount of resource available to customers in order to sell as much as possible, in the hopes that customers won't use the maximum amount of resource (and generally speaking, they won't.)

The problem with the concept of overselling is that there are no finite numbers and values that can define it, other than the obvious examples at a snapshot moment in time. For example, 1 TB of storage space on a $5.00 shared hosting plan is overselling right now...but what about 5-10 years from now? Just over 10 years ago, I got a great deal on a 2.1 GB hard drive for $269 CAD at Future Shop, when they were selling for $350 everywhere else. The technology changes and evolves, and while it's not quite as rapid as it was in the late 90's/turn of the millenium, there is still a growth factor there to be considered.

Some things can be offered as "unlimited", and while they're technically limited by the resources available, they're the types of things that users will very rarely approach the limits of. Email forwards come to mind. Most users won't create 1,000,000 email forwards, and if they did they'd probably have their own dedicated server (or beyond) since they'd have large corporate hosting needs.

What it really boils down to is that overselling vs. underselling is a judgement call for the most part. The only real way to tell is to take the revenue of a hosting plan and see how its works vs. the cost, and that's something that just has to be practiced.

For example, 1 TB of storage space on a $5.00 shared hosting plan is overselling right now...but what about 5-10 years from now?

That's a good point and probably how some hosts get in trouble. They oversell in a way that's reasonable when everything is first set up, but don't change with the times.

I've seen advice where with 20% or so overselling you're probably safe, but I doubt you can make any hard and fast rules.

One other thing with overselling is say you do oversell by 20%. Your server is likely still not full. Most people aren't going to use 80% of what they're buying so your sever while oversold still has room. As it starts approaching full you can always move some sites off the server and onto another. You can manage overselling, but you do have to pay attention.