White Paper: A Simple Guide to Network Capacity Planning

After many years of consulting and supporting the networking world with WAN optimization devices, we have sensed a lingering fear among Network Administrators who wonder if their capacity is within the normal range.

So the question remains:

How much bandwidth can you survive with before you impact morale or productivity?

The formal term we use to describe the number of users sharing a network link to the Internet is  contention ratio. This term  is defined as  the size of an Internet trunk divided by the number of users. We normally think of Internet trunks in units of megabits. For example, 10 users sharing a one megabit trunk would have a 10-to- 1 contention ratio. If sharing the bandwidth on the trunk equally and simultaneously, each user could sustain a constant feed of 100kbs, which is exactly 1/10 of the overall bandwidth.

From a business standpoint, it is whatever a customer will put up with and pay for without canceling their service. This definition may seem ethically suspect, but whether in the bygone days of telecommunications phone service or contemporary Internet bandwidth business, there are long-standing precedents for overselling. What do you think a circuit busy signal is caused by? Or a dropped cell phone call?

So, without pulling any punches, what exactly will a customer tolerate before pulling the plug?

Here are some basic observations about consumers and acceptable contention ratios:

  • Rural customers in the US and Canada: Contention ratios of 50 to 1 are common
  • International customers in remote areas of the world: Contention ratios of 80 to 1 are common
  • Internet providers in urban areas: Contention ratios of 15 to 1 are to be expected
  • Generic Business ratio 50 to 1 , and sometimes higher

Update Jan 2015, quite a bit has happened since these original numbers were published. Internet prices have plummeted, here is my updated observation.

Rural customers in the US and Canada: Contention ratios of 10 to 1 are common
International customers in remote areas of the world: Contention ratios of 20 to 1 are common
Internet providers in urban areas: Contention ratios of 2 to 1 are to be expected
Generic Business ratio 5 to 1 , and sometimes higher

As a rule Businesses can general get away with slightly higher contention ratios.  Most business use does not create the same load as recreational use, such as YouTube and File Sharing. Obviously, many businesses will suffer the effects of recreational use and perhaps haphazardly turn their heads on enforcement of such use. The above ratio of 50 to 1 is a general guideline of what a business should be able to work with, assuming they are willing to police their network usage and enforce policy.

The numbers above are a good, rough starting point, but things are not as simple as they look. There is a statistical twist as bandwidth amounts get higher.

Contention ratios can actually increase as the overall Internet trunk size gets larger. For example, if 50 people can share one megabit without mutiny, it should follow that 100 people can share two megabits without mutiny as the ratio has not changed. It is still 50 to 1.

However, from observations of hundreds of ISPs, we can easily conclude that perhaps 110 people can share two megabits with the same tolerance as 50 people sharing one megabit. What this means is that the larger the ISP, the more bandwidth at a fixed cost per megabit, and thus the larger the contention ratios you can get away with.

Is this really true? And if so, what are its implications for your business?

This is simply an empirical observation, backed up by talking to literally thousands of ISPs over the course of four years and noticing how their oversubscription ratios increase with the size of their trunk.

A conservative estimate is that, starting with the baseline ratio listed above, you can safely add 10 percent more subscribers above and beyond the original contention ratio for each megabit of trunk they share.

Thus, to provide an illustration, 50 people sharing one megabit can safely be increased to 110 people sharing two megabits, and at four megabits you can easily handle 280 customers. With this understanding, getting more from your bandwidth becomes that much easier.

I also ran across this thread in a discussion group for Resnet Adminstrators around the country.

From Resnet Listserv

Brandon  Enright at University of California San Diego breaks it down as follows:
Right now we’re at .2 Mbps per student.  We could go as low as .1 right
now without much of any impact.  Things would start to get really ugly
for us at .05 Mpbs / student.

So at 10k students I think our lower-bound is 500 Mbps.

I can’t disclose what we’re paying for bandwidth but even if we fully
saturated 2Gbps for the 95% percentile calculation it would come out to
be less than $5 per student per month.  Those seem like reasonable
enough costs to let the students run wild.

Editors note: I am not sure why a public institution can’t  exactly disclose what they are paying for bandwidth ( Brian does give a good hint), as this would be useful to the world for comparison; however many Universities get lower than commercial rates through state infrastructure not available to private operators.

Related Article ISP contention ratios.

By Art Reisman

Art Reisman CTO www.netequalizer.com

Editor’s note: Art Reisman is the CTO of APconnections. APconnections designs and manufactures the popular NetEqualizer bandwidth shaper.

2 Responses to “White Paper: A Simple Guide to Network Capacity Planning”

  1. NetEqualizer News: July 2010 « NetEqualizer News Blog Says:

    […] Posts Software UpdatesWhite Paper: A Simple Guide to Network Capacity PlanningSupport Archives Instant Bandwidth Snapshot Feature: Is this an Industry First?Is Your ISP […]

  2. NetEqualizer News: October 2015 | NetEqualizer News Blog Says:

    […] White Paper: A Simple Guide to Network Capacity Planning […]

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