What is Overselling?
You may have heard that a hosting company oversells. You may even have unwittingly realized that they do it without even knowing there's a term that defines it.
Overselling is the solution many companies use to offer a lot for a low price. The hosting company creates plans with features that, if all its customers decided to use them 100%, the system wouldn't be able to handle them.
A common case occurs with disk space. Imagine a company offers 40GB of disk space and sells the plan to 100 people even though the actual available space is only 200GB. In other words, while 400GB is supposedly available, the reality is that only half of that is real. What is the theory that leads them to do this? Most websites don't even have a gigabyte of space, so they offer a very tempting deal that they won't actually use. Obviously, the problem arises when someone does!
This term is closely related to the well-known overbooking practice of airlines, which sell more tickets than the plane's actual capacity, based on the assumption that some customers will always fail.
Normally, there aren't any problems with these hosting options, but one of the sites you share a server with may be using a lot of CPU resources, either because it uses a content management system (CMS) or because its site becomes popular. If several of your server neighbors have these features, the server may slow down and become a problem.
Why are there cheaper and more expensive VPS and hosting options?
Strictly speaking, it's a marketing issue. If you're quoting a VPS service (/vps) or hosting service (/hosting), the most attractive option is likely to be the one that offers more resources for the same price or a lower price. Competition between different companies in the market drives this phenomenon (which is quite unfortunate, by the way).
When choosing between different plans or different companies, it's recommended to be realistic about the usage of your service or website, and if you need more resources in the future, you can simply request a resource increase.
The saying "cheap is expensive," is well known, and in this case, it fully applies. As a company, we have a policy of providing the resources we truly offer at a competitive (real) price and taking our work with our clients seriously.