Does oversold RAM in VPSes guarantee data loss?

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The web hosting thread below was started by wormy on 2009-04-26 00:49:45:

I just had some thoughts cross my mind about oversold VPSes. If a hosting provider oversells their bandwidth and one or more of their clients demands more juice it just doesn’t come; there is a lag and the system acts as if the internet itself is choked up. Everything waits for available bandwidth and adapts around it seamlessly.

Now supposing the same host oversells CPU power and has a ton of VPSes with tiny memory allotments. If one or more clients start pounding away then their load average, and to an extent the load of the physical server will go up and all tasks will slow down a bit, very similar to an isolated physical machine that was running some intense application that was slowing everything down. Well in this case too the system will adapt to it and just run things slower.

If a host oversells hard drive space nobody will know about it until space on the physical box runs out so until then it’s totally transparent.

But what about RAM? If a host oversells RAM and the VPS thinks a certain block of memory is there but it’s really not then what? Supposing 99% of the RAM in a physical box is currently in use and suddenly the demand rises to 110% of the available RAM. Seems to me like applications on the VPS will not slow down but rather crash and vanish into thin air. Or try to start and as they load more and more RAM up suddeny they will just go poof! Taking user data with them.

Am I wrong about this and has openvz impremented some failsafe mechanism to prevent this from happening? Because if not it means anyone who runs anything in an oversold(RAM) VPS is risking losing or at the very least corrupting their data.

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