Hello just wondering on average how much do you oversell your available resources???

Never. This is very bad because it not only greatly impacts your customers sites but can crash the whole server. Besides servers are cheap now. I can build one for arround $500-$600.

aNc

This is something everyone does (airlines, phone companies etc...), but for some reason, web hosts tend to frown on it. Smart people do it, but I doubt anyone really wants to admit to it.

Overselling in moderation can be a very useful business tactic. For example, if the average plane seats 300 people and for the average flight of the 300 people who bought tickets 10 people either miss the plane, or do not show up for whatever reason, then you can safely sell some more tickets, this does not mean it would be bright to sell 10 extra tickets, but perhaps sell a few. Just a brief, and I mean brief example, as some locations for these flights may have a lower average as opposed to some may have a higher.

I have 5 servers and keep about 100 customers on each server. Each server is a P4 2.0 1.5Gb ram etc etc I always get nervouce when a server goes over 150 users because I used to work for one of those big hosting co's that just sticks everyone on a server with no care to the effect. The outcome can be very very bad.

aNc

kinda depends on what you are calling 'overselling.'

If you are putting 1000 clients on a raq3, then that's bad overselling.

If you have a 50G transfer available and have 100G sold but only 15G used, that's good overselling. You can always move up when they start getting close to your limit. As long as you can always deliver what you sell, overselling is just optimizing your utilization of resources.

I agree with SKelly1's logic on that one.

Originally posted by acameron
I have 5 servers and keep about 100 customers on each server....
Of course that depends on what you promise each "customer" in regards to disk space and data transfer in regards to server stability. No point in saying you only put 100 customers on the server if each of those customers is promised 5GB disk space and 50GB of data transfer. You can oversell a server with 1 client. All depends on what these customers are promised etc. :)

Right now, I do not. In fact, I have more then I really use - as I am planning to expand my business very soon.

I guess I didn't ask the question correctly. What I mean by overselling (I figured a lot of hosts did this) was a percentage of available resources. I'm sure there is an easy way to figure this out. For example if you have 100gb available bandwidth maybe on average you can oversell by 10% (so sell 110 gb knowing only 100gb will be used, just by analyzing the average use history). If you have been hosting for a few years and you know that most people only use x% of their allotment you can figure out how much you can safely oversell...

I haven't been overselling, I'm going to start though. I'm just trying to figure out what how much I can safely oversell.

Your better off overselling transfer than disk space. You can always buy more transfer, but upgrading to a bigger hard drive is a lot harder to do.

i think overselling is not that bad, because its so simple to move accounts between servers without issues ( cpanel do it in 1 click). so if server have enoughf Number of domains but not reach %10 of space or traffic, server load under .1 ,, why i do not add more ?

Ahh this discussion again. Answer to your question is depends :). If by overselling you mean selling your plans for less then it cost the answer is we don't oversell. If by overselling you mean having a server with 300GB bandwidth allotment and putting 100 4GB plans on it then we do do it.

I guess you can do it until your overage bandwidth bill equals that of the new server and then you just move users over to the new server. Of course you also would watch the number of users loaded on one server you would not want to host 600 users on one box whether they utilize the bandwidth or not.

Personally we looked at historical bandwidth usage for all of our plans and came up with the percentage of unutilized bandwidth for those plans and this is the percentage by which we oversell. So far it is working out ok.

QUOTE]Originally posted by acameron
I have 5 servers and keep about 100 customers on each server. [/QUOTE]

100!?:eek:

And a new client asked me ( a pre-sale question) through email if i oversell my bandwidth and space, while i have 3 servers and only 47 customers!?

My servers are 2x 1.3 Celeron with 512 MB Ram & XP2000 with 512 MB Ram, but still.. 47 is enough for me

You should steer away from using the words 'over-selling' because it just isn't, unless of course you are going to stop someone using their 100MB space if they need to or try and squeeze all of your bandwidth down a T1 when you need a T3. Bandwidth and disk space are something you can deliver just-in-time with the technology available today.

Good on the host who boasts "I don't oversell" so what! What have your customers gained by having 85% of your 80GB hard drive empty? Exactly what have your customers gained by you purchasing bandwidth they never do or will use? Nothing that's what.

It is just best use of resources and if you don't utilze your resources correctly then you give competitive advantage to those who do. In simple terms they are going to make more profit because they get the most from their resources and don't buy resources they don't need.

So to all you hosts who don't 'over-sell' I say keep it up, because that means more profit for me, more profit to keep prices lower, more profit to spend on marketing, more profit to spend on better hardware, connections and support, so long live all those who don't 'over-sell'

just my 3 cents :)

We always focus on "overselling" as it relates to bandwidth or space and to the need to take care and project usage reasonably. However, the one we overlook is CPU. I find that in almost all circumstances, performance/CPU/Processor/Memory becomes a factor before space or bandwidth. However, it is by far the most difficult to quantify and project. Almost all my movement of accounts from one server to another is based on CPU usage. I can always get more bandwidth, although I seldom have to. I can always add another hard drive, although I seldom do. Certain sites use very little CPU however as they are static with no traffic. I could easily put huge quantities of those on a server if I desired. However, others (and I certainly am not an expert at predicting), become a CPU burden quite unexpectedly. And, overload of the server becomes a problem far more often than space or bandwidth in today's world.

What control panels allow you to oversell bandwidth? I use Plesk, and I can't seem to sell more than whats allotted.

The master over sellers of this world are the banks. For every dollar on deposit they manage to lend out five or more. It works because people trust the bank but as soon as the trust is lost you have a bank run. FDIC insurance reduces the risk of a bank run because it adds confidence.

How big should a storm sewer be? Big enough to take care of the biggest probable storm. Anything less is not acceptable.

Web hosting is probably in between. If you undersell you have a hard time making money but if you oversell you run the risk of your dissatisfied customers abandoning you, badmouthing you and creating the equivalent of a bank run.

I'm too new at this to know what the golden mean might be.

I find that in almost all circumstances, performance/CPU/Processor/Memory becomes a factor before space or bandwidth

Exactly correct, I think it is the only true measure as it can take just one busy mysql driven site running a forum to bring the server to its knees.

Judging your customers disk space and bandwidth usage does take time and experience.

Originally posted by Reality Host
I haven't been overselling, I'm going to start though. I'm just trying to figure out what how much I can safely oversell.

What I did, when I finally started overselling, is to increase the amount offered by a bit...every so often. Do this until you are sure that there won't be any problems and you still have a safe comfort zone.

BTW - Its also good customer relations - because you can send out mass mailings, to your customers, announcing that you have given everyone more diskspace/transfer! Happy customers are loyal customers. :)

--Tina

Greetings:

"This is something everyone does (airlines, phone companies etc...), but for some reason, web hosts tend to frown on it. Smart people do it, but I doubt anyone really wants to admit to it."

1. Not everyone does it.

2. Have you talked with patients in a doctor's office to find out how frustrated they are that the scheduler books several people to see the doctor at the same time?

3. Have you talked with airline customers who have been bumped?

Smart people understand that customers are the kings and queens of their world.

The investment a customer makes in your business helps your business to pay bills, salaries, etc.

If you frustrate them because you cannot adequately meet their needs because you thought you where very smart, then they can go elsewhere to those businesses that do not oversell.

Thank you.

There is another convo. going on about this here:

http://webhostingtalk.com/showthread.php?s=&threadid=91829

If you don't oversell, you are your dedicated or colo providers best customer I guarantee it.

-Brendan

It all depends how big your company is and what the average users are using.

I oversell bandwidth on both my paid hosting and free hosting - because I can burst anytime I need and just be invoiced for the extra bandwidth. No need in paying for it until you use it.

As for HD space, I do not oversell on paying customers, but I do on my free web host.

Just as an easy to understand example, say my free web host had 25,000 (really higher, but 25,000 multiplies easily =) ) and each user gets 20 mb of space. You would need 500 GB of storage to not be overselling. Lets just say I have MUCH less than 500 GB, as 25,000 users would only use 25 GB not 500 GB.

Ryan

:confused: Its been nearly a year now since I last posted in this forum after being bashed and flamed senseless for having the balls to offer Unmetered/Unlimited bandwidth with my companies hosting packages. So I thought that now that I had seen the errors of my ways and no longer offer unmetered bandwidth, it would be safe to come back and join in the discussions and be a part of a community that new where it stood on such things only to find that there is a new word on the block and that is oversell.

Now correct me if I'm wrong but the definition of overselling is the art of telling your customers that they are paying for x bandwidth and you don't actually give it to them and if they should happen to use the amount you said you supplied then, that's ok I've got burstable bandwidth and I'll just pay for it when they use it. Well guess what that's exactly what unmetered/unlimited is.

I can't believe that you have put another sticker on it and all of a sudden it's ok. Now I didn't want my first post here after so long to be a negative one but I just had to say lets get real here, a rose by any other name is still a rose and that goes for a thorn too.

There's a difference in overselling - because you put a definite cap on what you are willing to give the customer, and you make that cap clear to the customer, before they sign the contract.

If I oversell on a server - I can actually afford to make good on my promise. If you offer "unlimited" - you can't afford to provide to the customer that will come along and want to backup 50 servers on your unlimited disk space and run Yahoo.com on your unlimited bandwidth. ;)

Unmetered, however, is something completely acceptable...in my opinion - as long as you tell the customer, upfront, what the cap is.

--Tina

:) Hi Affordable I understand what your saying but I have never and will never offer unlimited disk space and to oversell on disk space is exactly the same as offering unlimited disk space, both are impossible.

Anyway As I said I didn't want to start off with a negative post so I will digress

Originally posted by Bright-Byte
:) I have never and will never offer unlimited disk space and to oversell on disk space is exactly the same as offering unlimited disk space, both are impossible.


You're mistaken. If I have Server A and I oversell the resources on that server...and, by some freak chance, every user actually decides to use their allotted amount...I can add another server and put 1/2 the customers on Server B. That is still going to be within the realm of possibility and sound business practices...because adding Server B is not going to put me out of business or hurt my profit margin.

Unlimited disk space is impossible...if you offer it, as a marketing scheme, to get clients to host with you...obviously, you're going to make the pricing look pretty sweet to the customer. At that "sweet" price, you can't afford to add more servers if your "unlimited" customer happens to be a customer with a server farm and wants to back them all up on your "unlimited" disk space. It would be business suicide.

I'm not arguing either...just trying to explain the difference to you. I am NOT one of those people who flame unlimited hosts...I merely try to educate both those offering and those purchasing. :D

--Tina

:) Ok I'm not arguing with you either but your statement above doesn't hold water. For one you are talking about selling within your realms of possibility hence in this context is not overselling as it is within your realms not over them.

Please if you are talking about educating then have an open mind to the ways in which different people perceive and misunderstand certain meanings to a particular word.

1. Not everyone does it.

they overcharge their customers, not 'over-selling' means you are charging around 99% of your customers for resources they don't use, bet they are happy about that.

2. Have you talked with patients in a doctor's office to find out how frustrated they are that the scheduler books several people to see the doctor at the same time?

Not the same scenario at all - if the scheduler books 3 people for every time slot hoping only one turns up and when all 3 do another doctor is brought in to cover then that's the same as 'over-selling' hosting

. Have you talked with airline customers who have been bumped?

If airlines ran the same way as a host who 'over-sells' then another plane would turn up to take the extra passengers, a bad comparison if you ask me.

true over-selling is selling something you are not capable of delivering, as we all should be capable of delivering the bandwidth and disk space promised we are not over-selling, just pricing our services on known usage patterns to allow us to deliver a package of services to customers at a reasonable price. And utilizing our resources in a way which benefits the customer in our ability to offer prices which match the known pattern of resource usage.

:) Hey Gary, you have hit the nail right on the head with the following;

true over-selling is selling something you are not capable of delivering, as we all should be capable of delivering the bandwidth and disk space promised we are not over-selling, just pricing our services on known usage patterns to allow us to deliver a package of services to customers at a reasonable price. And utilizing our resources in a way which benefits the customer in our ability to offer prices which match the known pattern of resource usage.

Especially with this:
true over-selling is selling something you are not capable of delivering

Hence my disbalief when I saw people stating that it was ok. In my books (and I have been guilty of it in the past) it's the same as unlimited, selling something you are not capable of delivering.

Maybe we need to create a new word or term for this so that it doesn't congure up negative images. Something like withinselling lol :D oh well enough of this, I'm off to find something nice to say to someone :cartman:

Greetings Gary:

DNI => 1. Not everyone does it.


Gary => ”they overcharge their customers”

This is incorrect. If a customer is paying for a 2,000 square foot home, and we provide them with 2,000 square foot at an agreed up price, then there is no overcharging.

From an ethical perspective we are providing them with exactly what they are paying to be provided.

Thank you.

But we are not selling homes, or airline seats, we sell hosting - there is no similarity at all.

If you are being ethical then a customer who orders a plan for 100MB of space and 3GB of bandwidth must be supplied this? Even when he's not using it?

If we apply your ethics that means you HAVE to pay your bandwidth supplier for 3GB of bandwidth even though you are not using it, thus your costs are increased, the only way you are covering these is to charge your customer, so he is paying for 3GB and so are you when say only 500MB is being used.

So, if you are not paying your bandwidth supplier for every GB sold, whether used or not, you are being unethical? Being crazy more like. And of course making your bandwidth supplier very happy.

Now you ask your customer this question, "if we pay our bandwidth supplier just for the bandwidth used by our customers we can drop our prices by 50%, or would you like us to continue over-buying bandwidth and so charging you for what you don't use?"

Hosting isn't about selling a physical object, it's a contract to supply services within set limits, as long as you deliver within those limits when called upon by the customer you are neither unethical or over-selling. If you are an experienced host who can guage the resource usage by customers then you can adjust your prices to benefit your customers. If you are not so savvy you sell 3GB of bandwidth and pay your bandwidth supplier for 3GB when only 500MB is being used - who's the winner in that scenario?

Excuse me for butting in but I think this conversation is not looking at the issue from the right point of view which is customer satisfaction.

As a customer I want to receive what I contracted for and I don't much care how it is delivered as long as it is done lawfully.

The reality of shared hosting is that very few clients use their full allotment of disk space or their full allotment of bandwidth. As I said in a previous post, banks found out, several centuries ago, that they did not have to have 100% of their depositor's gold in the vaults to satisfy their customers needs. So they started lending out the gold in exchange for an interest payment. The banks still operate this way and their "reserve" is a small portion of their deposits. It works, it is lawful and it is profitable. The problem comes when the bank's reputation fails because then there is a run on the bank, the bank fails, and most people lose their money.

I believe that overselling is legal and profitable provided that all customers are satisfied. The customer has an added benefit in that it reduces the cost of hosting. Just make sure that you never oversell so much that your customers run away from you, that's the real danger!

Someone compared the overselling of hosting services to the overbooking of a doctor. That is not a fair comparison because in the case of the doctor the law of large numbers is not at work while it does work in favor of the host with a large number of servers. If you book two people at the same time for a doctor the chances are well over 50% that that one of the patients will be wasting some of his time.

I am now using a host that oversells way too much. I have been in touch with their help desk but they always reply that everything is hunky-dory at their end. I am in the process of looking for a new hosting service. It's their loss much more than mine.

My little experience as a reseller tells me that I need more than one hosting source. Don't put all your eggs in one basket! By having alternate sources at my disposal I can quickly shift my customers around. I even make a selling point out of it. I tell my customers that I am a reseller with several sources. I back up my hosts! If any one of my sources fails me then my customers are not left in the lurch.

It is to the customers advantage to go with a host that oversells. If a host expects you to use X bandwidth because thats what the average customer uses, but offers you X+10 and you use X+10, you are the one making out and getting more than you really are 'paying' for.

-Brendan