We had that problem and they(1and1) addressed the issue by moving us to another server. Bottom line they WILL provide what they are selling if you demand it. They may be be using the law of averages to determine what they can offer but it does not affect the service provided. So it not overselling. It's really just a more aggressive business model than most small hosts can compete with. The problem with many small hosts is that they are merely private branded resellers for the "big boys". Q, find a niche like others have mentioned. The easiest is to concentrate on local business, who may not mind paying more for less service to support another local business. If you have your own facility, give them a tour. I don't think starting a low level hosting business is very viable in the evolving streaming media high-bandwidth internet environmet. You may just as well write a new os system like Windows that doesn't do as much and try selling it for $1000. Or how about a music download service with $2.99 song downlods. Remember the wheel has already been invented and Goodyear could build one cheaper and better than you could.
I offer month to month contracts, a free Blogger Calendar to those signing up for a JSP hosting plan and a free Business Directory listing for family friendly sites for as long as they host with me. I can also fix a lot of things... What else should I offer? Q...
There's nothing you can offer that will get people to sign up. You need to get eyeballs first, they worry about what you offer.