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Overselling - towards a common sense approach

THE BASICS

DEFINITION

In a nutshell, it means selling beyond capacity to deliver and/or below cost.
 
IS IT GOOD OR BAD?

Yes and no. Read on...

If by overselling one means selling below cost, it is very bad. For the Web host and for you. Let's not kid ourselves here - a business exists to be profitable. If it isn't it goes bankrupt and out of business. Simple as that.

If by overselling one means selling beyond one's capacity to deliver, it is also very bad. One customer unhappy with service delivery can do far more damage than the good will of 100 satisfied ones. That is a general rule in any business. Additionally, not being able to deliver on a promise is probably the most important rule never to transgress in business.

If by overselling one means selling more than you actually have but within the limits of your abilities, it can be a good thing as it brings prices down for the customer; but it must be done carefully.
 

WEBNET77's "UNMETERED" BANDWIDTH

We are in a very fortunate position - we have massive reserves of bandwidth directly from tier 1 providers and our monthly cost is fixed. Regardless of how much bandwidth you use, it does not affect our cost so we are in a unique position to offer unmetered accounts knowing in advance we won't get hit ourselves with massive bandwidth costs.

We call it unmetered as opposed to the standard practice of the industry to call it unlimited because unlimited implies infinite and nothing is infinite. I would be very suspicious of anyone selling "unlimited" anything.

For example consider this conversation:

Q Can you get 100GB monthly on a WebPro package?
A Absolutely!
Q What about 1TB?
A No problem.
Q What about 100,000,000,000 Petabytes?
A Absolutely not. There is not that much bandwidth in the whole world (not in 2010 anyway).

The point is, unlimited bandwidth implicitly implies that a "bazillion" gigabytes is possible when it is obviously not possible for anyone at any time. Unmetered, is the correct term to use.

OVERSELLING DISK SPACE

We don't and we won't. It's dangerous and hosts are compelled to take one of several extraordinary measures to protect themselves if they choose this precarious route:

a. To limit the size and/or types of files you may store on their servers. This is very common and one should be wary of hosts doing this.

b. To terminate accounts for "using too many resources" when in fact they are actually using too much disk space.

c. Some have this little clause in their Terms of service: "Site to be used only for general web browsing and not for a repository to store files, download site .... only to store HTML files, images ... bla bla"

The bottom line is you buy a hosting account with 1,000GB disk space and it looks all wonderful but you can't actually use it. There are so many things you cannot do with the space given to you, it's pretty much impossible to do anything other than host HTML files and images.

At Webnet77 we give you disk space and what you do with it is entirely up to you. We have, for example, customers who use it primarily for a FTP repository. Others use it to backup their PC's. Some use it exclusively for videos. That's all fine. We allow it.

QUESTIONS TO ASK IF YOU SUSPECT EXTREME OVERSELLING

If you suspect a web host is doing extreme overselling here are some questions you can ask:

Q. What is your network bandwidth utilization during peak time?

Webnet77: around 40%

Answer should be less than 80% and definitely not 100%

Q. If I buy package _whatever_ what sustained bandwidth can I expect at peak times from my site?

Webnet77: no less the 60Mb/s at any time of day or night.

Answer should be no less than 10 Mb/S (50-80 Mb/S would be a better answer). Remember, if the host throttles your bandwidth (very common) to say 512 kb/S, your maximum bandwidth per month even if you run flat out for the entire month is little more than 100 GB / month!

Think of it this way - if a server has a 10 MB NIC (Network Interface Card) the maximum theoretical bandwidth for the server for 1 month is about 2,500 GIG. Now, lets say your site is one of 300 sites on the server and they use an average of only 7 GB each, that comes to 2,100 GB leaving you with a maximum theoretical bandwidth of only 400GB. In practice, you will actually get a lot less since most bandwidth is used during peak times. The obvious conclusion therefore is even if your host gave you a bazillion gigabytes in your package, you could never ever use it.

Q. What is will the server load be during peak times and what does it regularly spike to?

Webnet77: average less than 0.6, 5 minute peaks < 2

Answer should be 1 (100%) or less for average during peaks with 5 minute spikes under 2 (200%). This is a critical spec as it tells you how fast or slow your site is likely to be during peak times (when it matters). An overloaded server can easily run at a load of 1 for 20 out of 24 hours and spike to 5 or even 10 or more at peak times. This can cause long delays in server response time and even the dreaded "page cannot be displayed" and is something you definitely want to avoid. Also, a server under high load is far more likely to crash.

Q. How close are you as a company to reaching capacity (all levels ... network, staff, building etc etc) and what plans do you have in place to cope without causing disruptions in service?

Webnet77: We have a minimum of at least 20% capacity in spare servers plus everything else that goes with them, powered up and running at all times, ready to transfer backups in the event of a catastrophic server failure.

There must be generous spare capacity at every level and solid plans in place for expansion before capacity runs out. For example, a company with 10,000 customers and only one data center technician will have long delays in responding to requests for support.

Q. What is the response time of your DNS servers and do you have them on different networks or even different countries?

Webnet77: We have two DNS servers located in two different countries on two entirely unrelated networks

The answer should be 50mS or less and "yes" to different networks or countries. This is also important as DNS resolution that is slow can cause initial domain lookup to be slow which is exactly when you need it to be fast.

Some hosts boast 3 or 4 or more DNS servers. This is of little use if they are all on the same net block or even on the same network. If DNS servers are on different networks, preferably even physically located in different countries, it makes the DNS all the more robust and far less likely to be prone to network routing issues which cause DNS lookup failure all too often.
 

IN SUMMARY

There is nothing wrong with overselling per se. In fact, it is healthy and helps keep prices low because those that use less are in fact subsidizing those who need more. But there is a danger ...

In the ever increasing desire to attract more and more customers, web hosts are offering larger and larger packages, often with the sole purpose of attracting customers with their monster offerings and with little concern to how they will actually make good on their promises if someone ever took them up on it.  This is both reckless and foolish because it is false advertising.

Bottom line is you get what you pay for. We all know there is no such thing as a free lunch and if it looks too good to be true, it probably is.




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