Actual vs. Allocated
Author: Rob Atkinson of Potent Products
Although it could be said that 'overselling' has negative connotations, it could also be said that 'overselling' has brought down pricing for many of the services we use. Telephone, Gas, and Electricity, are but just a few. Specific to the Web Hosting Industry, some (all? most?) Data Centers can and do, oversell their own limits as one way to bring down pricing.
So even if a Web Hosting company does not oversell 'their' Data transfer, that is no guarantee the Data transfer amounts provided to them from their Data Center has not already, been oversold. There is also the fact, if there is more than one hosting account on the Server, it can truthfully be said that overselling is used on the Server.
So, now that we've cleared up the fact the 99.9% of Hosting companies are overselling — in one way or another — let's look at how that can be true.
As previously mentioned, there is the Data transfer provided by the Data center. Is the Data Center overselling? Is there a way to find out for sure? Very few Web Hosting companies will ever worry about this. Part of it goes to culpability — if you don't know you can honestly say you don't know, so why ask? Past history has also shown that whenever a Hosting company needed more amount of Data transfer and had the money to pay for it, there have not been any problems in getting more.
Server CPU Usage
Overselling is not limited to just Web space & Data transfer; Overselling can apply to any Services offered with a Server. The biggest most important service provided by any Server is CPU usage. With only two hosting accounts on one Server, it can be said that there is "a possibility" they will both need 100% of the CPU at the same. Granted, the "risk" of that happening is pretty high and most Hosters will take that risk. With a properly managed Server, the "risk" of that happening with 500 hosting accounts is about the same.
This is where most people focus with regard to overselling and it is also where most people get confused.
The Allocated Method
Some Hosters take great pride in saying, "We do not oversell Web space allocations for the Server." Which means, if they have 50 GB of Web space available, which is typical for your average 80 GB hard drive, then they have not sold over 50 GB of Web space. Continuing with this example means, if they sell Hosting packages providing 1 GB of Web space they can sell 50 accounts for this Server. Typically, they must charge more to make a profit.
The Actual Use Method
Some Hosters take great pride in saying, "We do oversell Web space." Which means, with same 50 GB of Web space and noticing only 10% of the accounts are using most of their Web space, they can put more accounts on the same Server and lower prices for everyone. The best example for the advantages of overselling are with Reseller packages. Imagine a Reseller with 2 GB of Web space. If they can oversell they can potentially have 10 accounts of their own, each allocated 1 GB of Web space. This is because they have not 'actually used' all of their 2 GB.
Our Reseller packages provide "The Actual Use Method".
There are Pro's & Con's to both methods and the "Actual Use Method" takes better Management skills then the "Allocated Method" does. Regardless though, of using the "Allocated" or "Actual Use" method, Hosters can still (knowingly or unknowingly) be overselling their Data transfer and for sure are overselling their CPU usage.
Whether overselling or not, if a Hosting company is not properly managing their business and each of their Servers, there will be problems for everyone. Fortunately, Clients at Potent Products know our Servers are properly Managed and well looked after.