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I don't think I was still there when that happened.
GVH is right, OpenVZ is a shared environment. Overselling is perfectly fine, and is done by a lot of hosting providers. An example:
Say a person were to open a gym, They can support 50 people at once in the gym, but they have 250 people sign up, they know not all 250 people will come to the gym at once and can "oversell" capacity based on market analyzation.
The same principle applies. Not every single client on a node is going to be using 100% CPU, 100% RAM, 100% HDD, 100% burst.
Hosts can then allocate extra clients to that node, because they know it wont have an effect on existing clients. Some hosts oversell to the bone, where it begins affecting clients on the node, more-so in terms of I/O.
Well, I knew him for quite a while, and that's why I never bought his servers, cant trust a 18 year old.