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Overselling and Rocking the Web Hosting Industry

by Daniel Briere

It's true. We oversell. In fact, we oversell our services to such an extent that we receive ninety-five hundred customer complaints each minute!

Of course, I'm lying - about the second part of my statement anyway. We do oversell our Web hosting services, and we take it to the extreme. We're constantly pushing the envelope, looking for ways to put more users on a server, thereby making more money. If you believed the propaganda put forth by most of the Web hosting companies in the industry, you'd also believe my statement about our customer complaints. In reality, our customers couldn't be happier.

Overselling is not a crime, and I hope I can open your eyes to the facts through this article.

First, let me address the question, "Why do hosts oversell?" Only by answering that question will we be able to continue.

When Web hosting was born (think 1994 or 1995), the Internet was, of course, new. HTML ruled, Websites were boring and static, and scrolling marquee was all the rage. It wasn't too difficult to setup a server, give folks 10 Megabytes of storage space for their Websites, and make a bundle of cash. After all, when dealing with straight HTML, storage needs are very small.

Fast-forward to 2000. Price per Megabyte has fallen dramatically. The cost of bandwidth has plummeted, especially factoring in the telecom's overcapacity. IT was now possible to receive disk space amounting to 500 Megabytes! Boy, life sure was good!

Then, as many believe, the industry went crazy. Zip to 2007, and you might thank so too. It is completely ordinary to find hosts who offer a minimum of 10 Gigabytes of disk space. The nerve!

Again, the "ethical" players would have you believe this change is bad. But here's the story behind the numbers: the Web is no longer a static, HTML-focused place. The Internet as a whole is a socially-driven medium, its very life based on the ability of its users to communicate with whomever they please. HTML cannot meet these needs. Scripting languages, such as PHP, Python, and Ruby (among others) have moved into the picture, handling the needs of forums, photo-sharing sites, and even the mundane guestbook.

The truth is that some hosts have adapted to meet the needs of Web hosting users, and some have not. Large amounts of disk space eventually become necessary for a Website operating in 2007. Photographs, databases, sound files, scripts, and more - all need space, a lot more space than a simple HTML page.

So to answer the question, "Why do hosts oversell?", I say, "Because they are meeting the needs of their users."

Which brings us to question two: "If a shared hosting server holds hundreds of clients, each client has 10 Gigabytes of allotted disk space, and the server only has a 200 Gigabyte hard drive, how is this NOT lying?"

This is a good question.

The stodgy hosts do deserve a mention for pointing out a problem with many of the hosts that oversell: while disk space matters, it is not everything. By its very nature, a shared hosting environment puts many different Websites on one server. Obviously, a single one of those Websites cannot fully utilize, at any given time, the total sum of the server's resources - resources such as CPU processing time/power and RAM. The problem with many overselling hosts is that they do not talk about the CPU limits in their marketing - all they mention is the copious disk space included with each hosting plan. In fact, it is even hard to find a mention of CPU usage limits in many hosts' Terms of Service agreements.

However, it is very possible to utilize the full space allotted to you in a shared hosting account. Problems with CPU usage (which is generally capped at a percentage, such as 4% or 5%, for a set period of time, such as 90 or 180 seconds) arise primarily due to faulty scripts. As I already mentioned, many Websites in 2007 are totally reliant on dynamic scripts for their back ends. However, if a script which does not properly manage the resources of the CPU and RAM is written and given out to users, disaster can strike. The worst part of this situation is that many (my estimate is about 60 - 70%) scripts in use today are NOT properly written.

Again, the unethical hosts in the industry try to turn this into the overselling hosts' problem. But why is this a Web hosting problem? It's not! This is a problem with the folks who are writing and developing scripts. I won't name names (I don't need a lawsuit right now!  ), but I will say that some of the most popular scripts on the Internet are junk, in terms of the way they are written. Multihoster (which I seem to, unfortunately, have full management duties of now) is just one example that I CAN name.

In terms of the physical possibility of each user on a shared hosting server using his or her maximum allotted amount of space, there is no possibility it could happen.  However, hosts that oversell know this, and when a server starts to fill up, some clients are moved to another, new server to make more room, so everyone can use the full space allotted to them.

(In case you're wondering, server moves happen every day, and when conducted right, the clients do not even know it happened!)

So our third question would be: "Why all the uproar over overselling?"

Another good question!

The bottom line, as I've touched on in a previous article, is that some hosts are not in the position, because of bad decisions in the past, to oversell. Overselling is a risky strategy, in that a budget must be available for the constant addition of servers. Certain larger hosts that were around during the dotcom bust are in debt up to their eyeballs now, and are in no shape to put themselves in such a risky position.

Instead of admitting the problem lies with them, these hosts choose to throw the blame to oversellers, who have figured out how to run a profitable business, providing users with the low-cost, high-quality services they're asking for.

The expensive shared hosting provider is a dying breed, and they all know that. In just a few more years, we will no longer have to put up with their overselling propaganda. However, in the interim, it is important to address the true issues involved with overselling, and I hope I have done that with this article.

Daniel J. Briere is the CEO of Netpreneur Host, a Web hosting and domain registration company for Webmasters and Internet entrepreneurs.

Monday, Jul 9th, 2007