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Overselling Isn't Necessarily a Bad Thing
Let me offer a different perspective on overselling with an analogy.
Imagine a provider has a host server that can normally run 100 virtual machines (VMs), which they sell for $2/month each. At this price, a potential customer might hesitate before buying.
Now, what if the same provider uses that same host to run 200 VMs with the same specs, but drops the price to $1/month? The provider's operational costs don't significantly increase (especially with NAT), but customers will now likely buy without any hesitation.
The result is a win-win: the provider gets double the customers, and twice as many customers get a service they are happy to pay for.
On a related note:
Some might argue that since the total revenue remains the same, the increased cost from handling more support tickets means the provider is actually losing money.
I think this view is a bit short-sighted. A large customer base is always incredibly important. It's far better to have customers who submit support tickets than to have no customers at all. Furthermore, if those tickets are handled well, it can significantly boost customer loyalty.
A larger customer base also increases the visibility and potential sales of a provider's other products. These are all valuable, long-term benefits.
LowEndBox & LowEndTalk.
