14 Sep 08 Linux virtualization, vmware, xen, hosting, and squeezing the most out of your resources

I’d guess that 90% of hosting providers ‘oversell’. This essentially means that should they have 1,000GB allocated, they might offer 15 packages of 100Gb to 15 of their customers, banking on the fact that no one will fully use their 100GB allocation – Selling 5 Virtual Machines with 256MB RAM on a 1GB host, assuming that no one will use their full RAM allocation. This is bad, because you’ll generally be able to confirm that you’ve been allocated the resources, but nonetheless benchmark tests will show that you’re just not getting them, and your environment will be sluggish and unresponsive. This is the same as airlines selling 110 seats on a 100 seat plane. When that 101st paying customer does show up to claim his seat, he’s stuck without a flight.

The general consensus is that a VPS is a cheaper and lower-grade option than a dedicated service, however VPSs have a number of undisputable advantages over dedicated servers and I’m going to discuss why almost all the dedicated machines I manage are hosts for a range of VPSs.
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