Overloading is when a server is so heavily populated that it begins to affect performance. Sites can run slowly or can go down entirely. This is essentially overselling on steroids.
Most hosts that overload either do so due to willingness or incompetence.
On one end of the spectrum, you have “hosts” (kids, amateurs, foreigners, etc) that don’t know what they’re doing. With their reseller account, VPS, or dedicated server, they simply fill up a server, unaware of what the does to sites. Their only knowledge is with using cPanel, and that’s not adequate to be a server admin. Some go a step further and offer asinine “master reseller” or “alpha reseller” plans, which cause a server to spiral out of control. Even if they wanted to, such plans remove the actual provider, and it becomes impossible to manage the hardware. There’s no way to cap usage or specify server density/population.
On the other end, you have the greedy mega-hosts (“unlimited” hosts) that “solve” the issue of overloading by severely curtailing what can be done in an account. And it still runs slow!
At the big hosts, overloading happens due to greed and an overzealous desire to turn a profit. Why only make $2,500 per server when you can make $5,000? (How do you think they pay those ridiculous commissions of $75 to $100 each?)
If you crawl through the Terms of Service (ToS) or Acceptable Use Policy (AUP) — the fine print that nobody reads — you’ll find the draconian limits that are heavily enforced by these hosts. CPU, RAM, and MySQL queries are so low that you essentially have to run an HTML-only site, or have a site with no traffic, to avoid them.
Some of the limits are hidden entirely, and not even found in the ToS/AUP documents! You have to dig around the internet to glean information from tickets that have been posted, and complaints online.
The biggest reason sites run slow at large hosts is throttling. Everything is throttled. Rather than have a server that immediately responds to a request, the requests are put into a queue and loaded as resources become available. This is why, for example, a page loaded from a good host — for example, Veerotech, or EuroVPS — loads in 0.5 seconds. And why does a page from a crappy host — for example, Dreamhost, Hostgator/EIG — take anywhere from 1 to 8 seconds.
And the first hint of overage on your part results in a suspension due to resources, paired with an upsell to their other services. At better hosts, such things don’t happen.
It’s important to note that not all unlimited-style hosts do this. Most do — mostly because EIG owns 60+ brands — but not all. So far we’ve found SiteGround, Stablehost, and InMotion to be responsible hosts. They care more about customers than turning a profit, and it shows.
Some hosts like to pretend a VPS cannot be oversold (and thus overloaded), but that’s simply not true. Most virtualization technologies allow for RAM overcommitment, and the older methods allow for CPU overuse.
The most common problem technology is OpenVZ, but not because it’s necessarily bad technology. (Well, UBC/”burst” on CentOS 5 is, but not swap on CentOS 6. But that’s another story.) The real problem is again amateurs, kiddies, foreigners, etc. Thanks to dummy-friendly control panels like SolusVM, everybody likes to pretend to be a “host”, but few are experienced/seasoned server admins. So what you end up with is a node (server) that is populated with too many VPS, including not enough headroom for the server itself. If you’re not micro-managing the server regularly, it’s also easy to allow users to hog the CPU, which causes problems. OpenVZ is popular mostly because it is cheap and easy to set up/run.
Virtuozzo is a commercial version of OpenVZ, with better RAM allocation for the end users (SLM). It suffers the same problem with CPU abuse.
Hosts like to say that Xen, VMware, and Hyper-V cannot be oversold, but that’s not true — you can “balloon”/overcommit the RAM. KVM can overcommit both CPU and RAM.
As with anything else, who you choose as a host is the most important factor. It’s why we use an excellent hosts like EuroVPS, LiquidWeb, and Godaddy for our important VPS projects. Some hosts promise that they do not oversell their VPS. Unlike shared/reseller hosting, this can be true! Stablehost, for example, as OpenVZ VPS plans, and makes this claim. (And it’s true! We use one at digitalFAQ.com as one of our primary servers!)
In recent years, more and more hosts have adopted CloudLinux as a tool to combat abuse on a server. Hosts can populate a server without fear of abuse because CloudLinux limits the user account to a % of CPU. The only person with a slow site is the one trying to use too many resources, usually 10%. While this doesn’t prevent a host from overselling, and thus overloading, it prevents the users from hogging the system as if it were their private dedicated server.
The problem, however, is that some hosts are too cheap. This is commercial software that carries a monthly fee of about $10 per server. While that would be chicken feed to any host of any size, remember that these hosts are already doing everything they can to squeeze that last dime of profit out of the server. As a result, the server can run slowly and often do. When a host is not using CloudLinux or 1H Hive on their shared/reseller server, then find another host.
The most common offenders are pretty easy to find — refer to any fake “top ten” list online, which is based purely on affiliate pay. The higher the commission, the more they cut corners on their customers. Or look up the term “slow” (i.e. Dreamhost slow), and you’ll quickly discover if that’s the case. Generally speaking, it’s those faux “unlimited” hosts that are the worst offenders: Dreamhost, Yahoo, Network Solutions, myHosting.com, etc. And then all of those EIG brands: Fatcow, BlueHost, Hostmonster, HostGator, iPage, JustHost, IXWebHosting, and many more. Again, they have 45+ brands.