Some question about the "perks" we get?


I know that we get some quite good perks such as 5800GB bandwidth and 534GB webspace. Now how sustainable are they? If we have a site with multiple videos and they are worth say 100GB (webspace) and say 400GB (bandwidth). Now as an example multiply that number with 10-20 dh user… thats a lot of webspace & bandwidth being used…

The question is how can dreamhost provide us with all this space? and then keep on adding to it?

Another question is the new Private server concept… If we decide to enable it, do our site get put up on special servers? if that is the case then i feel like cheated as i think all our sites should be put on high speed servers as we are paying for it…

Last question: just why are dh doing so many promocodes, how do they make profit if they get customers who come via promocodes??


It’s called “overselling” by some and “just in time provisioning” by others. :wink:


If you feel cheated by that then you either have not read what the PS servers are all about, or you just are not paying attention.

First of all, the “special” part of the PS servers is not just a “high speed” server, it’s about the the RAM/CPU and resource management. Secondly, you are not paying for it unless you are paying for a PS account - what you are “paying for” is a shared server account. Strangely enough, depending upon the “load” pf your shared server, you may actually end up with more resources being available to you most of time then you would have using a lower configured PS server, and not have to pay an extra cent for the privilege.

A “Private Server” reserves resources for your exclusive use while a shared server requires you share. :wink:

Maybe because they want to grow and realize increasing economies of scale? It might be possible that, even if they don’t make much profit from a first year promo deal, they can make money from long-term customers who stay and pay the standard billing rates (but I’m just guessing!).



I like the word “just in time provision”. Somebody has tried to used up 200GB disk space and they succeeded. So if you really need that much space, don’t worry. They will give you the space as they promised.

I don’t think anybody is cheated. I don’t think private server runs faster than normal server in terms of CPU speed and hard disk speed. It is better in terms of better management of CPU and RAM resources. Don’t forget that we are still in a shared server.

Like rlparker mentioned, they look for long-term benefit. They welcome you to try their hosting with the best smile on their face. If you are satisfied and decide to stay, here the business comes.

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DH can support any one person - or even a bunch of people using all their space. If everyone suddenly used all their space, there would be trouble - that is, DH would have to buy a lot of disks and start losing money.

Consider the provisioning of electricity. Does the electrical grid have the capability to supply everyone with electricity should everyone turn on every electrical device that they have? No, the grid would brown out or selectively shut down service. Should the grid be designed to generate enough power to handle that situation? No, because the probability of that occurring is so minuscule as to be not worth paying for.

As others have said, the servers themselves have the same physical specs as the other servers at DH, they just run Lixux VServer which allows them to guarantee a certain amount of memory and CPU to individual accounts (as represented by virtual servers). These dedicated resources are costly and you pay extra for the guarantee that they will be available to you when you need them.

The economics of promo codes is actually related to the economics of affiliate programs. Acquiring a new customer is profitable enough in the long run to make it worth paying extra marketing money to obtain that new customer. I’d guess that the low-cost shared web hosting business is willing to pay between $50 and $150 for each new customer. DH pays $97 for each new customer. The “cost” of the promo code actually comes straight out of the referral fee for the affiliate. From the DH perspective, they pay out the same amount for each referred customer regardless of whether they use a promo code or not.

So who loses in this scheme? I think it is the professional marketers. Because of the way promo codes work at DH, it tends to be much more profitable for professional marketers to promote the other web hosts who have schemes that richly reward the marketers much more than the actual customer who is signing up. In practice, the Dreamhost system makes it less lucrative to refer them and more lucrative to refer people to other hosts.

Is this fair? Well, I can’t speak to it’s fairness, but the policy is a really great deal for new customers!

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The funny thing is that you don’t even have to leave the hosting topic to make more examples. It seems most that bash overselling are just hosts that can’t compete on price.

What’s not oversold? Imagine if everyone submitted a support ticket at the same time… or called, if a host offers phone support. If you have 10 - 50 employees and 10,000 customers, it would appear that support is always oversold.

Luckily, that never happens, which is why it works.

Plus the bandwidth is oversold, so even if a host didn’t oversell, that doesn’t mean everyone in the DC could hammer the bandwidth around the clock. :stuck_out_tongue:

I believe Michael stated here before that over 99% of the customers use less than 1% of the resources. Sounds like they’ve got a grasp on basic math and how to make a profit. :wink:

On the flip side, a kid that signs up for a budget reseller account & tries to go compete with Dreamhost (or any of the big names), would quickly learn a hard lesson. Never bring a reseller account to a 1,500+ server fight.

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To be honest our current needs for website hosting is very minimal - we only need a website where people can download pdf files relating to their securities.

However Dreammhost still offered a cheaper rate than a number of other hosts. The biggest plus for me when we chose DH was that they do allow all that space, and most of all you can have unlimited email addresses, with the only limitation being your overall hosting limits.

Our previous host charged more and allowed 150MBs of space, 10 GB of bandwidth a month, 5 email address and only 20mbs per email address. All well and good in a quite month with nobody travelling but quickly became inadequate later on.

Knowing that I have all that extra space and bandwidth is a comfot buffer for me. Plus in the event we decide to move onto bigger things website wise, its nice to know I dont’ have to go looknig at upgrading anything just to allow for some more space.

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Plus, it’s hard to convince people to pay more for less, which is basically what hosts are trying to do when they trash-talk overselling competitors, rather than try to sell themselves on their own strengths.

Their argument usually goes something like, “Why pay them $9.95/month for a billion GB of diskspace, if you can only use 80% of it, when you could just give us $40/month for 50 GB that you can use 100% of?” One problem with that argument is that there are Dreamhost customers using more resources than any of them offer and paying less for it. Personally, I prefer overselling over overcharging, which is basically the other extreme. :wink:

You could also think of it like an all-you-can-eat buffet, sorta. Most people don’t eat what should be 5 meals at one sitting and the buffet price is profitable for most people. The fat guy eating 12 plates of crab legs at the Golden Dragon is not the average customer. Oh great, now I’m hungry. :stuck_out_tongue:

But you can be sure that none of those restaurants want the whole town to starve themselves for a week, all at the same time, then come in and see how much they can eat for their $9.95. Damn those evil oversellers! :smiley:

I’m not saying DH or any other big overseller is the right choice for everyone, but I’d never make a decision based on overselling. I want my my hosts to be profitable, so I don’t have to worry about them going bankrupt every time a silly multi-million dollar billing error pops up!

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Giving people vastly more space than they need, and vastly more bandwidth than they need isn’t unfair. It’s “insurance”, in case your site gets slash-dotted, or better yet, becomes incredibly popular.

After all, disk space and bandwidth are pretty inexpensive these days. The BIG costs in a hosting business are

  • acquiring customers (typically $100+/customer)
  • business office support (typically $20+/problem)
  • tech support (typically $35+/problem)

What’s more, the longer someone is a customer, the less likely they are to need support, so by giving people higher limits for sticking around eliminates the cost of acquiring a replacement customer and the much higher support costs for that new customer.


Agreed… “just in time provisioning” is my new favorite term for the rest of the day or whatever.


Well, diskspace is still somewhat expensive in the ranges DH is offering them. You can’t just take the price of one 500gb hdd and assume that the cost of offering you 500gb at DH. If you actually use 500g, you can be almost certain that at the very least two copies exist of those 500g, since at DHs quantities, disk churn becomes a real problem – you expect harddisks to fail, and you don’t want your customers to even notice. If you assume $100 for one 500gb hardisk, you are already talking two of those to handle 500gb of actual data (plus backup overhead; in the worst case this will be another 500gb-1000gb, but in the average case it will a WHOLE lot less and almost negligible. For the sake of this argument, assume two 500gb discs for 500gb of storage (=$200). That’s the cost of the harddisks. You are also going to need a case to put them into, rackspace to put that case into, and controllers to drive those drives in that rack. This can easily add another $10-20 per harddisk, possibly more. Then you are going to need to get power to those harddisks, cool the racks, and make sure you have UPS. This will be even more costs.

$250-300 initial cost (and this is optimistic) per 500gb block, plus quite a bunch per month to keep those running smoothly isn’t too far-fetched. So a single customer using all the provided space will easily cost DH a bundle of money.

Thing is, the vast majority of users are not using 500gb of space, nor even close to it. Some are (and that’s fine – good reviews, recommendations, etc. come from those people), most aren’t. Even if you are currently in the latter category and suddenly need 500 gigs of space – no problem. There is always enough spare capacity to handle a few people doing this over night. There is never enough spare capacity to handle EVERYBODY doing this overnight, but that never happens.

Bandwidth follows similar rules. The initial costs are already sunk when you set up a server (and it’s a bit harder to spell it out in numbers per customer); usually, however, a single server has a 100mbit interface to the DH network. If you WERE to use 5tb of traffic, you would use an average of around 16mbit/s of that (and since traffic is almost never average, you’ll probably be using twice that during busy times of the day). It just takes 3-5 customers doing this to max out a single network interface. Then again, this almost never happens; the vast majority of sites on the internet use less than 1 gigabyte of traffic in a month, let alone 1 terabyte. Similar things to disk usage apply.
(it is also quite a lot harder to prove that your network interface is congested and you are not able to even use all your traffic in a month; this MAY happen, but probably doesn’t very often. However, proof-wise, slow speeds can often equally well attributed to broken routes or upstream problems DH has no control over.
Also, DH could not handle it if, overnight, all their customers were to start taking advantage of all that traffic afforded. Then again, that never happens.


I would rather use 1% of my monthly bandwidth than worry every month that I’m going to go over and pay their ridiculously high overage charges.

$23.95 per month (Code Monster) to use 1% vs $40 per month and worry that I’m going to pay another $40 in overage charges?

I’ll take my chances with overselling thank you. :slight_smile:

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DH has 6 backups at any given time in a hidden directory named “.snapshot”.

Visit me, please…


Snapshots only record the diffs between what’s in your directory, and what’s changed. It’s usually set to about 10% of total disk space. But since it’s a RAID, there are a couple of spare drives per shelf, so there’s maybe a 20% overhead in disk hardware.



They are full backups, near as I can tell. I accidentally deleted a directory once and copied the files from the .snapshot directory. If it were a “diff” directory, I would think that that wouldn’t work.

Visit me, please…


Well, the are “real files” in pretty much every way that actually matters to you (you can manipulate them to recover your data), but Scott is correct about them not taking the full space of the “file” you “see” represented in that snapshot directory.

They are like a diff in that only changes are actually taking “real space” (somewhere in the file system!) when recorded in each of the snapshot dirs; the actual way it is managed is does not really produce duplicate copies of files that are identical in each of the snapshot directories (it’s “automagical”! :wink:



Cool. I like automagical. :slight_smile:

Visit me, please…


This is from DH support. We are both right.

Might be the same explanation as the previous post, but different wording.

“When a snapshot is taken it makes a copy, subsequent snapshots only keep track of diff’s between the older snapshot and the
more recent one (to avoid redundancy). In the event of data loss you can
copy the files from the snapshots back into your main directory completely in tact.”

Visit me, please…


No. Those are quite definitely not actual copies of the data, but rather lazy copies (depending on how you look at it you could explain this as “the storage layer actually “just” stores the differences between that ‘backup’ and the current version of the data”. DH does most certainly not copy all your data once an hour.


… and why would you think that ?


I’m still pretty sure such a “snapshot” is just going to be a lazy copy with copy-on-write mechanics – anything else would just take way too many resources.