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There are two aspects to overselling:
  1. Putting too many accounts on one physical server, and
  2. Selling more disk space and bandwidth than the company owns or controls.
The first is a no-no, but it's also very difficult for you to detect. You may experience extreme slowness or time-out errors when trying to load your website or download your email, or you may get database errors, or email that you're expecting might take a long time to arrive in your account. This is not meant to be a tutorial on troubleshooting this kind of thing, so it will suffice to say that a good host does not overload their servers.

The main point of this article is to point out the second aspect of overselling, something that most of us realise the airlines do on every flight. If there are 100 seats on an aircraft on a particular flight, the airlines will sell 110 tickets. (The actual amount will vary, but we'll use these numbers as an example.) Decades of experience with airline passengers shows that there is a good chance that 10 people will not show up for the flight, and so 100 happy people get on the flight oblivious to the fact that there are ten poor sods out there stuck in traffic or still asleep in bed because their alarm clock didn't go off. Those 10 passengers will get put on later flights subject to the rules of whatever ticket they bought. If the statistics are off for that flight and only 95 people show up, then 5 lucky stand-by passengers get on. If 105 (or all 110) people show up, then the airline will ask the excess passengers if they will accept some form of compensation in order to volunteer to take a later flight. At the end of the day, generally speaking, everyone gets where they are going (some people with a little extra cash in their pocket because they volunteered to take a later flight) and the airline minimises its exposure to loss by avoiding flying their aircraft with more empty seats than is necessary.

Guess what? The same thing happens in the hosting business, and people are still pretty much oblivious to it -- which is actually a good thing, as if you are having problems with your hosting as a result of this "type 2" overselling, then it's because it has become a problem and it is now a "type 1" overselling situation. The difference in the hosting business is that you don't have someone offering you cash, a meal voucher, and a night in a hotel if you'll just let that other guy have that disk space you wanted.

This "type 2" overselling has become very common, largely because of the drop in the cost of data storage (i.e., disk space on hard drives in servers) and bandwidth (i.e., the amount of data flowing through wires and over the airwaves around the Internet). Only a few years ago, a business hosting account cost big bucks for 50 MB of disk space and maybe a gigabyte of bandwidth per month. Nowadays people would collapse with laughter if a host told them that that's what they'd get if they were to host with them. Nowadays the figures are staggering: 100 GB of disk space and 1000 GB of bandwidth... or more! Some companies are now even advertising included bandwidth measured in terabytes! (That, in case you're wondering, is 1 000 000 000 000 bytes, equivalent to ten 100-GB hard drives. The entire US Library of Congress contains 40 TB of data.)

But this doesn't mean that you have all of that capacity reserved only for your use, and that it is there for the taking and nobody else can use it. Not on your life! Like the airlines, hosting companies (especially the massive ones, but even the smaller guys have to keep up) "oversell" their actual capacity (disk space and bandwidth) knowing that most people will not use their full capacity. It's simply a numbers game for them, and they're playing you like a fiddle while you go around telling everyone what a great deal you got on so much disk space and bandwidth -- even though you're not even using 1% of it and probably never will.

So, again, don't be sucked in by inflated claims that have no bearing on reality. Chances are that the smaller host offering a more modest 500 MB of disk space (which is still a massive amount by any stretch of the imagination) is offering just as good a service as MegaCrazyHost over there, and may have other advantages too. Plus, again, make sure you check the fine print, and also have a look at the arithmetic in the "Almost Unlimited Hosting" article. Most importantly, remember that there just ain't no such thing as "unlimited". Really!
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