Simple. It’s called overselling.
Overselling is when you sell more than what you truly have to offer.
Kind of like how banks operate using fractional reserve banking (Bastards!)
When everyone goes to pull out their money (or in this case, use their server resources) — it’s a massive disappointment and most people end up getting shafted.
To answer how ssd vps with cpanel can be cheaper than Shared Hosting lets go over the basics first:
What’s Shared Hosting?
Shared Hosting is generally a single server (or in our case a cluster of servers ) with cPanel or Plesk installed. Accounts are then created, some with reseller rights, so they can in turn create sub-accounts.
A single IP address can be shared for all accounts, but sometimes extra IP’s are sold to individual accounts if they really need them.
With a dual socket modern server (E5–2600 series) with adequate RAM (±48GB), a hosting provider can fit approximately 1,000 to 10,000 websites per server.
The final number depends on many factors.
- What CMS websites run
- Are they properly optimised
- Their traffic patterns
- Aggressiveness of MySQL queries
- Can the storage subsystem keep up with the CPUs?
What’s VPS Hosting?
VPS Hosting stands for “Virtual Private Server.” By installing a hypervisor like Xen, VMware, HyperV, you can abstract the hardware, and create virtual slices of hardware. It’s more difficult to oversell VPS Hosting (paravirtualised) ie. Virtula Machines, because the RAM is carved away upon provisioning and dedicated towards that VPS.
Yes, there are things like memory ballooning that help overselling of RAM, but it’s usually a RED FLAG moment when you’re ballooning that either a RAM upgrade on the host is in order, or a new host needs to be racked and setup for production.
So How Can VPS Be Cheaper?
The answer is pseudo-virtualization.
It’s pretty much a guarantee that if you see a VPS selling for under 5 USD/month it’s using OpenVZ.
OpenVZ is very similar to CloudLinux and is based on containers and OS level virtualisation. You can “burst” beyond your prescribed resource allotment with ease.
At VCCLClouD we used to use Virtuozzo up until 2015. It really was quite difficult to deal with the “noisy neighbour” effect because of this.
Bottomline — VPS Hosting can be cheaper than Shared Hosting because essentially it is no different than Shared Hosting. It’s shared kernel, and can be dangerously oversold giving the illusion of dedicated resources.