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Dreamhost on Overselling

Josh Jones from Dreamhost on the standard practice of overselling:

Imagine we didn’t “oversell” at all. We still offer 20GB of disk space and 1TB of bandwidth on our $7.95/month plan because that’s what the competition has forced us to offer. 1TB of bandwidth is about an average of 3Mbs. 3Mbs for a month costs us about $90/month. The 20GB of disk space actually costs us about $200 (BELIEVE IT OR NOT!), because of the level of availability and backups we provide. So, we’d be losing about $200 up front and $82 / month on each and every customer!

Wednesday, 24 May 2006