Widely used method for maximizing resources, specially by telecommunications companies.  It works on the assumption that subscribers (customers) do not use all of the resources assigned to them all of the time, such as communication lines, bandwidth, storage capacity, etc.

For example, an ISP might offer dial-up service to its customers.  If this ISP has capacity for 100 simultaneous calls, they can oversell their service in an appropriate ratio (which varies from place to place and from time to time).  If a market study determines that a 10 to 1 ratio is acceptable,  then the ISP can safely offer service to up to a thousand customers.  Likewise, if this ISP offers mailboxes with 10 megabytes capacity, they can safely assume that customers usually receive a lot less than that and most of the time the mail will be erased from the server as soon as it's picked up.

Telcos use this concept a lot.  A local line switch may have capacity for switching 10,000 simultaneous calls (another example) and most home phones are idle for about 70%1 of the time.  From this, the numbers can be worked out to determine how many more customers can be serviced before an upgrade is necesary.

1. Gross speculation on my part.

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