(this post will also appear in the virtual private server blog with additional content)
The terms oversubscription and contention are often heard when it comes to providing services as an ISP, for example regarding CPU resources, memory, bandwidth, etc. Generally speaking, it means selling/providing services or advertising them to more people than there are effective simultaneous resources available. Let us look at bandwidth, an often cited example, first:
Let us assume your VPS is on a Gig link to the host, and that there are 3 more guest systems on the same physical host, also with their own Gig link to the host, but the host only having a single GigE connection to its switch. In that case, we have a contention ratio of 4:1 since we have 4 VPS with Gig links, but only one effective Gig uplink to the outside world available. Here, oversubscription is rarely an issue – a typical VPS going at a sustained gbps isn’t feasible and would be better sold as a dedicated machine anyway, so such rates are only seen during spikes, with the other VPS rarely competing for the available host bandwidth. This example continues from the host to the switch it is connected to – how many other physical interfaces there are that are competing with the respective uplink. A trivial contention ratio here might be 8:1, 16:1, 24:1, or similar – i.e. your typical GigE switch with a gbps fibre uplink has to serve 8, 16, or 24 machines that, in theory, could also use the entire bandwidth of 1 gbps available. Here it is already trickier to judge whether contention might be an issue – a customer with rather evenly shaped traffic curves is more predictable than a customer seeing a lot of spikes during the day, spikes that can take valuable bandwidth away from other customers.
How do ISPs do it? Most ISPs accept contention ratios based on the traffic they see on the switches, routers, throughout the entire backbone. This is a legit practice, and as long as it doesn’t handicap one group of users against another, no one will probably see that is in effect being done at all. Some ISPs sell bandwidth at dumping prices, fully aware that their traffic/cost/revenue model is anything from risky to shady – when you encounter a bandwidth deal that sounds too good to be true, it probably is – like anything in life. Traffic cost patterns have evolved in various regions of the globe, and comparing several providers on a single continent or within a large geographic region (US, UK, continental Europe, etc.) can help you a lot to find out the truth behind the myths of “unlimited traffic” – it also helps asking questions such as “unlimited traffic – I have a website generating 100TB of traffic each month – still unlimited?”. Often the smallprint of providers will tell you things like “irregular use is due to caps”, “bandwidth in excess of…is subject to approval/surcharge”, etc. Make sure you get your ISP to give you the facts straight, ask until you are sure that what you need and want is going to be provided without hidden costs.
How do we do it? In terms of bandwidth, we have a contention ratio of 1:1. Yes, that’s correct. Bandwidth we sell is dedicated, and we make sure that you won’t share it with any other customer even in case all of them are requesting their share at the very same moment. This model has its disadvantage: our traffic is more expensive than oversubscribed traffic. The advantage: you get what you pay for, no matter what, no hidden costs, no caps.