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  1. #1
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    Publishing an Overselling Policy?

    Hello,
    This question is for any host, it does not matter if you oversell or not, however I dont.

    Do you think it is important to publish an official (and honest) Overselling Policy. If you dont oversell then you should state it, however if you do oversell, you should say to what extent)
    Keith I Myers
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  2. #2
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    Absolutely. Transparency is always best for the customer.
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  3. #3
    For the people who actually care about that stuff, they will tell right away whether or not you oversell.

    But I'm willing to bet that the average customer could care less whether or not you oversell. Heck, they probably don't know what overselling a server means.
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  4. #4
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    When I ran a paid hosting company I explained our overselling policy very clearly (ie. what resources were oversold, by how much, and how we determined when the server was "full").
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  5. #5
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    Is there a reasonable chance that you will be overselling in the future? If so, don't make "non overselling" a marketing strong point.

    But if you're 100% sure that you will not be tempted to go for even a bit of overselling, sure, go ahead. It's something that some people care about.

    If you dont oversell then you should state it, however if you do oversell, you should say to what extent
    I don't see it happen in seriously regulated markets (say airlines), I don't see why it would be a requirement for hosts. It would lead to unfair comparisons.

    If anything, an airline company should state (for a competitive advantage) just how low is the chance to not be boarded due to overselling. In the case of hosts, I'd much rather have them publish real statistical data regarding server uptime and performance.

    Stating an overselling policy is like giving an employees:customers ratio. The ratio in itself means nothing. The response time, the quality of the response, the experience and expertise of the employees are things that actually matter to me as a customer. A bloated staff team is easy to achieve.

  6. #6
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    We have a link to our 'No Overselling' policy on our homepage.

    Looking at the visitor footprints, quite a few people click there straight from arriving on the homepage.

    It can be worth having, especially since some customers may think "Huh? [Some host] offers 500 GB disk-space for $2 per month, but [Your host] only offer 1 GB for $5 per month" - if they see the policy, they may understand it more.

    They may not care and still opt for the other host, but if you don't oversell (or not massively), it can be worth listing to avoid any ambiguity.
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  7. #7
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    Quote Originally Posted by ldcdc View Post
    Is there a reasonable chance that you will be overselling in the future? If so, don't make "non overselling" a marketing strong point.

    But if you're 100% sure that you will not be tempted to go for even a bit of overselling, sure, go ahead. It's something that some people care about.



    I don't see it happen in seriously regulated markets (say airlines), I don't see why it would be a requirement for hosts. It would lead to unfair comparisons.

    If anything, an airline company should state (for a competitive advantage) just how low is the chance to not be boarded due to overselling. In the case of hosts, I'd much rather have them publish real statistical data regarding server uptime and performance.

    Stating an overselling policy is like giving an employees:customers ratio. The ratio in itself means nothing. The response time, the quality of the response, the experience and expertise of the employees are things that actually matter to me as a customer. A bloated staff team is easy to achieve.
    Hello,
    From someone who has done Overselling in the past, I do not think I will be going back to it. I have just published my Overselling Policy on my site.
    Keith I Myers
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  8. #8
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    Honestly if you don't oversell yea you should publish it. But stating that you oversell publicly and letting customers know that there is a chance the may not get what they paid for (all though if you oversell right this sort of thing won't happen) that could be a bad thing. Personal I wouldn't oversell or encourage any body to oversell. Because its oversellers who make the market a hard place. For example hostgator.com They are a great host but people like them kill the market.
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  9. #9
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    It's very frustrating competing for the average customer against hosts that advertise huge resources for the same or less price. We've had clients who bought but decided not to pay because at the last minute they decided to go with a host that offers 500GB of disk space for the same price. Then of course there are people who grill you, saying "you're too expensive" because what you offer for a few bucks another company offers ten times the resources for the same price.

    Eventually I think everyone will have to oversell or go the unlimited route just to compete. Heck I'm positive if we'd gone down that route we would have attracted more clients, regardless of stating our no-overselling policy on our website. For many average clients, seeing the "500GB disk space and 1TB of bandwidth" is still a tempting sight, regardless of overselling, and regardless of if they're only going to use a tiny tiny fraction of that for their blog.

  10. #10
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    Quote Originally Posted by ItsJustHosting View Post
    It's very frustrating competing for the average customer against hosts that advertise huge resources for the same or less price. We've had clients who bought but decided not to pay because at the last minute they decided to go with a host that offers 500GB of disk space for the same price. Then of course there are people who grill you, saying "you're too expensive" because what you offer for a few bucks another company offers ten times the resources for the same price.

    Eventually I think everyone will have to oversell or go the unlimited route just to compete. Heck I'm positive if we'd gone down that route we would have attracted more clients, regardless of stating our no-overselling policy on our website. For many average clients, seeing the "500GB disk space and 1TB of bandwidth" is still a tempting sight, regardless of overselling, and regardless of if they're only going to use a tiny tiny fraction of that for their blog.
    Hello,
    I know your point of view on this and I agree. I am hoping that a few more "Unlimited Alpha Resellers" come aboard and die 3 months later. It would help the cause.
    Keith I Myers
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  11. #11
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    Frankly I don't much care whether a host is overselling, and I care far less about whether they claim they are/aren't. The term is subject to so much individual interpretation (and downright lies) that it's worthless.

    Example: 49 x 20GB hyper-super-alpha-master-reseller accounts (hence thousands of end-user accounts) on a P4 with single 1TB SATA. Oversold or not?

    If you really want to impress me with your transparency, show me your hardware spec, maximum number of clients per server (or other method of determining when a server is full), policies for resource abuse, long-term uptime records etc.
    Chris

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  12. #12
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    Quote Originally Posted by ItsJustHosting View Post
    It's very frustrating competing for the average customer against hosts that advertise huge resources for the same or less price. We've had clients who bought but decided not to pay because at the last minute they decided to go with a host that offers 500GB of disk space for the same price. Then of course there are people who grill you, saying "you're too expensive" because what you offer for a few bucks another company offers ten times the resources for the same price.

    Eventually I think everyone will have to oversell or go the unlimited route just to compete. Heck I'm positive if we'd gone down that route we would have attracted more clients, regardless of stating our no-overselling policy on our website. For many average clients, seeing the "500GB disk space and 1TB of bandwidth" is still a tempting sight, regardless of overselling, and regardless of if they're only going to use a tiny tiny fraction of that for their blog.
    I completely understand where you're coming from and I get that same sinking feeling when I see an offer for as much space as your average hard drive for 99c a month. The same questions: how am I going to compete with THAT? Why would the average customer even look at anything other than what overseller x is offering?
    But then I think of it as a long-term race. While they're gaining customers at a speed probably 10, 20, 30 times faster than I am, I like to think that in a few months or a year while I'm happily turning over a nice profit with happy customers, overseller x is in hiding because his customers want his blood after he lost all their data when his server exploded.

    While there will always be oversellers I definitely think there will always be a place for those of us who are sensible about what we do and the effort we put into offering high quality hosting at more sensible prices will be rewarded.

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  13. #13
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    Quote Originally Posted by dbbrock1 View Post
    For the people who actually care about that stuff, they will tell right away whether or not you oversell.

    But I'm willing to bet that the average customer could care less whether or not you oversell. Heck, they probably don't know what overselling a server means.
    I 100% agree.

    Most people really do not care, and most of the time it never becomes an issue. So why portray it as so special? All I see it as is another way to market yourself. Besides that... *bleh*
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  14. #14
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    Honestly, I think you guys tend to get too caught up in this type of stuff.

    I'd bet my left arm that 90% of customers could care less about overselling, unlimited bandwidth, etc. Obviously it gets discussed to the max on here but heck, we're a hosting forum.

    Clients want reliable service. Oversell or not, keep them online and you'll have no complaints.

  15. #15
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    In any business line, the actuaries crunch the probabilities, and the businesspeople crunch the P&L, and the product matrix is born. Do you think your cellphone network would work if everybody with "free friends & family" nailed-up a call 24x7? Or if every person going to KFC really ate "all they could eat"?

    What matters is: are your customers happy with your product?

  16. #16
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    Quote Originally Posted by speedcolo View Post
    In any business line, the actuaries crunch the probabilities, and the businesspeople crunch the P&L, and the product matrix is born. Do you think your cellphone network would work if everybody with "free friends & family" nailed-up a call 24x7? Or if every person going to KFC really ate "all they could eat"?

    What matters is: are your customers happy with your product?
    That was the PERFECT way to explain it.

  17. #17
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    As I said some moons ago on another thread, overselling is not a scam or a bad thing, it is a marketing strategy with macro risk management involved. Done right, both provider and consumer will benefit from it.

    However, by overselling, you have to risk yourself not your customers. You have to provide what you are promising.
    If you are offering large amount of web space/bandwidth, you have to make your calculations what % of your customers will use what % of the resources, and distribute high-usage and low-usage accounts over the servers wisely.

    World's finance is built on overselling policy. For example in Japan, if every single person tries to pull all the money in their bank accounts, the country will collapse because there will be not enough money to pay. But banks know 99.999% that it will not happen, and they are taking that risk.

    Overselling servers are the same. You are almost 100% sure that everyone in the server will not use their allowance to its limits.
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  18. #18
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    Quote Originally Posted by Mekhu View Post
    . . . Clients want reliable service. Oversell or not, keep them online and you'll have no complaints.
    Yep, bang on the money.
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  19. #19
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    There is of course another solution, we could all pick a target overseller and sign up to one of their crazy unlimied $5/month packages and work our socks of to cram their disks full and max their bandwidth, lets face it, none of us are making much use of that 100mbit downstream our servers have, only the upstream. Sound like fun anyone?

  20. #20
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    Quote Originally Posted by KDisk View Post
    Hello,
    This question is for any host, it does not matter if you oversell or not, however I dont.

    Do you think it is important to publish an official (and honest) Overselling Policy. If you dont oversell then you should state it, however if you do oversell, you should say to what extent)
    Why would you want to draw attention to something most customers have no clue about? If you think you can generate sales by prominently promoting an overselling policy, then go ahead. Most oversellers don't state as much, HostGator as an example. I doubt it will benefit your company by raising an issue that is frankly not on the mind of the consumer. Unless of course you are on a campaign to educate people why overselling is so bad and you think you can generate sales from those newly educated customers. Somehow I don't think it is worth the effort.

    HostGator oversell their shared accounts without stating as much in their TOS. It's a very unfair numbers game and they are taking a chance (and they are big enough with enough spare servers) that they can host you without limits. But they do cover themselves with an INODE limit.

    To use the airline example: By the same logic I don't think it is fair on me that an airline can sell my seat on a plane twice, just in case I don't show up. By the same token I can't imagine an airline using in their ad campaign that they don't oversell the plane. They all do, it's industry-wide practice. This is the giant pink elephant in the room. Everyone knows its there but no one wants to talk about it.

    If you think you can offer a solid reliable service and have the resources to back it up, then by all means oversell. If not follow Foobic's advice:

    Quote Originally Posted by foobic View Post
    ... If you really want to impress me with your transparency, show me your hardware spec, maximum number of clients per server (or other method of determining when a server is full), policies for resource abuse, long-term uptime records etc.
    I wait to see which host wants to be that transparent.

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    Last edited by HostYourIdea; 09-30-2009 at 11:49 AM. Reason: I can't spell or type
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  21. #21
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    Quote Originally Posted by HostYourIdea View Post
    Why would you want to draw attention to something most customers have no clue about? If you think you can generate sales by prominently promoting an overselling policy, then go ahead. Most oversellers don't state as much, HostGator as an example. I doubt it will benefit your company by raising an issue that is frankly not on the mind of the consumer. Unless of course you are on a campaign to educate people why overselling is so bad and you think you can generate sales from those newly educated customers. Somehow I don't think it is worth the effort.

    HostGator oversell their shared accounts without stating as much in their TOS. It's a very unfair numbers game and they are taking a chance (and they are big enough with enough spare servers) that they can host you without limits. But they do cover themselves with an INODE limit.

    To use the airline example: By the same logic I don't think it is fair on me that an airline can sell my seat on a plane twice, just in case I don't show up. By the same token I can't imagine an airline using in their ad campaign that they don't oversell the plane. They all do, it's industry-wide practice. This is the giant pink elephant in the room. Everyone knows its there but no one wants to talk about it.

    If you think you can offer a solid reliable service and have the resources to back it up, then by all means oversell. If not follow Foobic's advice:



    I wait to see which host wants to be that transparent.

    --Michael
    Hello,
    I really dont mind being transparent, to an extent. I would not even mind a making an automated script that returns the exact number of cPanel accounts per server and post it in a private place.

    I am also not putting a giant flashing "No Overselling" banner at the top of every page. It is just page under the "Our Company" link. It is minly for those who care about that.
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  22. #22
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    Quote Originally Posted by KDisk View Post
    Hello,
    I really dont mind being transparent, to an extent. I would not even mind a making an automated script that returns the exact number of cPanel accounts per server and post it in a private place.

    I am also not putting a giant flashing "No Overselling" banner at the top of every page. It is just page under the "Our Company" link. It is minly for those who care about that.
    I don't see any harm in this. I personally don't think I'd do it but you're likely right. There's a group of potential clients out there that DO care about this stuff.

  23. #23
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    Most oversellers don't state as much, HostGator as an example.
    Interestingly enough, they used to have a no overselling stance (even publicly stated I believe) when they were relatively new to the market. Then again, all small, new providers should probably not rely on overselling for their profit making.

    World's finance is built on overselling policy.
    I'm not so sure that the world's finance is the best example at this point in time. It's not exactly a true success story.

    Everyone effectively placed bets on real estate never reducing in price and the assumption led to risks that no one really measured properly. Overselling is a form of betting based on historic data. Its success rate does depend on the relevance of the gathered data for the near and mid term future. If HTML dies and is replaced by something more bandwidth intensive like Flash, average usage per customer will go several factors beyond what most hosting providers (and the data centers they use) have estimated. It could cause quite a stir, and a change of price levels, promises made, and TOS clauses.

  24. #24
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    Quote Originally Posted by Mekhu View Post
    Honestly, I think you guys tend to get too caught up in this type of stuff.

    I'd bet my left arm that 90% of customers could care less about overselling, unlimited bandwidth, etc. Obviously it gets discussed to the max on here but heck, we're a hosting forum.
    I agree with this. A large percentage of people shopping for hosting probably don't even do so much as search for reviews before signing up and are likely shopping on price alone. With that mindset, they figure why would you not take the eleventybillion megabyte plan?

    I think making "No Overselling" one of the primary draws to your hosting company is a misguided effort since it is only truly significant to a small number of those shopping for hosting.

    Perhaps including a short blurb about how your system resources are allocated and why that is (can) be better for the customer's site is fine but if you are plastering "OMG NO OVERSELLING" all over your site and advertisements, you might as well just replace it with "I like turtles" because it means just about as much to the general population.

    I can see where emphasizing no overselling in targeted ads at places like WHT could work to your advantage is getting a few extra sign-ups but even then, all anyone who is interested has to say is "prove it" and your ship is basically sunk.

    Dave

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