Overselling Advantage

Normally we are thinking in overselling phenomenon in negative way, that the provider is selling a disk space or bandwidth that doesn't own, but if you think about it from another way, overselling if done in the right way to avoid slowing down the server, you will get better price from your provider.

 

Overselling can not be done "in the right way" - overselling always leaves somebody hanging, or someone to take the fall when things come crashing down. As a provider you have no way of knowing how much each user will push the limits of their package - if ALL of the users on a given server (or even 90, 80 or as little as 70% of them, depending on the policy on overselling) maxes out, you have a problem. The "right way" would be to sell a solution where you have a scalable approach, and can give users what they need, when they need it, without having actual servers standing around doing nothing - hence why cloud computing has become one of the major selling points - "limitless" (not really, but not too far off either) power that can be assigned as needed.

Overselling is bad - there is no advantage (apart from for the host, which can save a little on server-costs compared to building up a fully available (and to some extent) redundant setup).

Of course, in a real world scenario, you will have a few users that won't push the boundaries of their package - of course you will - however, the better option is to find these users, and tell them the can just as well go with a smaller package, more suited for their needs - diskspace, for instance, is cheap - it's not really a cost-factor any more - having enough disk space to give people what they pay for isn't hard. Bandwidth, on the other hand, is not cheap - and can be one of the points where overselling can be mostly overlooked by the users - unless, of course, you get some heavy hitters on certain servers that blatantly deprives all other users of their allotted share.

Sorry. The "advantage" you're talking about is peanuts - the price of hosting is already next to nothing, and "better price" is not really a selling point - "better service" or "getting what you actually pay for" are way, WAY better options.

 

As PoPSiCLe said there is no "right way" for overselling and that is the reason for being called "overselling".
Overselling will just bring you bad reviews and drive people away from your business.

 

I think a lot of people confuse overselling with overloading. Pretty much EVERY host oversells to some extent. Whether they can actually back the resources they sell is another questions. Mainly, companies that own their own hardware can do it much easier - for example, we can simply add direct attached storage, expand volumes etc etc. Those renting VPS's & dedicated servers can't really do that.

 

For clients' side. I believe there is no such thing of OVERSELLING consider being a good thing. In many sectors, not only in HOSTING industries.

For providers' side. Well...this is the secret recipes Here is an example. A bank. How many money they have? If all clients withdraw the funds, at the same time, I believe the bank will go collapse. So, in that case they must have a CAR ratio and follow regulation. (it is an example of overselling. They don't have it all, but they 'promise' to have them all).