Overselling: Web Hosts’ Little “Secret”

You’ve probably seen the amazing web hosting deals offered by companies like BlueHost, HostMonster, and LunarPages. The claim to offer something like 300GB of storage, and 3000GB (3TB) of bandwidth for the low price of $7/month (or similar).

Do you really think that’s possible? Looking at storage space alone, a 500GB Hard Drive costs $150. Do the math, no one can afford that. You’re paying $7/month for your hosting account ($84/year), right? Now, you’re buying what’s called shared hosting. For $7/month you have access to a small slice of a server’s resources. There are probably 100 other websites hosted on the same computer as you. So, that would mean that computer would need 30000GB of storage (300GB x 100 users). That’s 30 Terabytes, or 60 of those 500GB hard drives! There’s no way any webhost could afford that, and there’s no way their servers would accept that much storage.

So what’s going on? The hosts are overselling. Your electric company does the same thing. The servers have a certain amount of storage, say 1000GB (two 500GB hard drives). Though there’s only 1TB total, they go and tell everyone they’re getting 300GB. The company figures that no one is going to use all of the storage they’re allotted, and puts 100 sites on the same machine. So, theoretically you could hit that 300GB mark, there just would be less storage available for everyone else. The trouble is, you can’t hit the 300GB mark. The company puts a little clause in the hosting contract that says your service can be cut-off for “excessive use of resources.” Basically, they say “knock it off!” whenever you use “too much” storage. Of course, only the hosting company knows what the cutoff point is. It could be 20GB or even 5GB. It’s legal, because you agreed to it when you paid for their service.

The same goes for bandwidth. The hosting company may claim 3000GB, but are you really getting that? No. They’ll likely cut-off your service when the CPU cycles your site is consuming goes beyond a certain point. As the visitors flood in (like when a blog post you wrote gets Dugg), your CPU usage will increase. This is a nice excuse for the host to cut your service, as it doesn’t draw too much attention to your service.

Pretty much every host on the planet oversells, but some do it more than others. But what if you need a ton of storage and bandwidth? What do the bigger sites do? You have a few options, but be prepared to hand over some cash. Just note that if you’re starting a new site/blog you probably won’t run into the overselling problem, but when it grows you may need to look at different hosting options. Here are your options:

  • A Small Orange: ASO offers quality shared hosting for those who want to avoid the reselling game entirely. I’ve been hearing a lot of good comments about ASO lately, and they seem like a great host. They have plans for nearly everyone. From the $25/year “Tiny” plan to the $30/month ($360/year) “Super” plan.
  • VPS Hosting: A VPS, or Virtual Private Server, is like shared hosting in the fact that there’s more than one site per server, but the similarities end there. With a VPS, there are much less people on the server, you have root access generally, and you can even resell unused space to other people. RapidVPS seems to have some good options, and I’ve been considering them for a new project of mine.
  • Dedicated Server: How would you like to have a whole computer dedicated to hosting your website? This is what the big web companies like Yahoo do (though they use more than one computer in a Server Cluster), and it isn’t cheap. You’re looking at $99/month or more (generally more). 1and1’s Root Servers are allegedly good, though some people have complaints about the Managed Servers.

Well, hopefully I’ve done an adequate job at describing web host overselling. It’s not entirely easy to put to words.

  • http://www.ruelicke.net/ Marco Ruelicke.net

    Interesting. First time I heard about this. Fortunately my hosting company isn’t overselling, I just checked the contract to make sure because I’m using a shared hosting deal and got a bit worried.

    Thanks for pointing that one out, I’ll stay alert on this when I change my hosting plan/company, which won’t happen any time soon anyway…

  • http://www.webmaster-source.com Matt

    I’ve been having a discussion about this here. When I found out about the overselling, it made sense, but I was a little surprised. It’s no big secret, though. Just Google “overselling” and you’ll get a lot of results.

    Here are a few good links from Google:

    Also, the Web Hosting Talk forum is a great place to research hosts. I use them a bit. http://www.webhostingtalk.com/

  • http://www.blogsolid.com Imar

    Hey Matt, cool article! I added a link at the bottom of my post.

  • http://www.webmaster-source.com Matt

    Thanks for the link!

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  • http://www.bluegravity.com Blue Gravity

    We at BlueGravity.com have never oversold bandwidth or hard drive space. While it may seem you are getting a better deal with some hosts that advertize a gazillion gb of space and bw for $10/mo, I dare you to use that space and see what happens.
    We never over sell. Never have, never will. This keeps our servers running smoothly all the time with almost no downtime. Most of our virtual hosting servers have been up for years without any (unscheduled) downtime, and when down for scheduled things like upgrades repairs etc, its no more then 5 minutes.
    If you are looking for one of the few honest hosts left check out http://www.bluegravity.com, or give us a call at 1-877-8-HOSTING. You can even ask for me, Tim, and I’d be glad to talk to you.
    Timothy J. Biggs
    Blue Gravity Communications Inc.

  • http://www.webmaster-source.com Matt

    “While it may seem you are getting a better deal with some hosts that
    advertize a gazillion gb of space and bw for $10/mo, I dare you to use
    that space and see what happens.”

    Well said.

    And by the way, Blue Gravity looks good. The plans, at a glance, have the look of an honest host. I may have to look closer sometime.

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  • Mir

    This is an old post, but you forgot to mention the terms of service of shared hosts. Most have strict limits, such as the number of files you’re allowed to host and resource usage. So how many websites or blogs can you run before you get suspended? 5, 10, maybe 20. (Don’t count on them having any traffic, because that will get you suspended right away) Make sure to look at there TOS before you sign up.

    I think it’s better off to go with a vps or dedicated if you are running an important website. By the way, I use http://vpsblaze.com/ for vps hosting, RapidVPS is good, but VpsBlaze is way cheaper.

    • http://www.webmaster-source.com Matt

      VPS.net, Linode, and Slicehost are good options too.

      As for this being an old post, don’t worry. A lot of people land on old posts from search engines or links from other posts. Thanks for adding your comment.

  • http://CommunityColor.com Kevin Delaney

    I am a big fan of shared resources as shared resources are energy and resource efficient. The idea that a web site must have all the resources that they sold on hand is a waste of resources.

    IMHO, the purpose of limits on bandwidth and storage is to give clients guidance on when they should buy more resources.

    A host should have the capacity to handle current usage, plus big spikes.

    In other words, the ideal host would be building the a shared network to cover peak usage. Clients should have a scalable bill that grows as they consume more resources, and there should be guidance so people will know when they need to move to a more industrial hosting solution.

    I really dislike the Bluehost Model where they promise impossibly large amounts of bandwidth and storage, but limit the accounts with a mysterious “CPU Throttling” limit. A mysterious CPU throttling limit is likely to kick in at the most critical moment for a business.

    It becomes impossible to plan the scaling of a web site when the company provides zero guidance on scaling.

  • http://www.mingledhost.com Dim

    We as a company are completely against overselling. We have over 100 servers, and we do not oversell a single one. We have enough trusting clients to be able to make a healthy profit, without needing to engage in such activity.

    check out http://www.MingledHost.com if you are interested