Network Capacity Planning

It's a fact of life for any one managing a network that the traffic in your network will increase over time. The good news is that every time you need more bandwidth, the costs for equipment and network capacity has decreased significantly. This has been true since the dawn of the packet switched network and there is no reason to believe that the trend will not continue for a long time.

So, if the costs are dropping all the time, do we really need to plan the capacity of our network? Why not just throw a lot of bandwidth and hardware at the problem and forget all about it?

Well, you could do that, but just because the costs are dropping doesn't mean that the costs are low. Long-distance network connections (like a frame relay PVC from London to New York) are still very expensive, and virtually all network equipment except for LAN switches is expensive. The only place where you can really afford to put in a lot of overcapacity is in your office LAN. In all other cases, you need to plan your network so that you buy the right amount of bandwidth and the right equipment.

So, you need to know when your network connections are reaching their capacity. You need to keep track of both short term and long term statistics for your network connections. If you're keeping track of the traffic in your network, you will start noticing trends, both daily, weekly, monthly and even yearly.

Even if you only have a single Internet connection and a basic office network, it is important to monitor your bandwidth usage statistics, especially on your Internet connection. Your ISP will want you to upgrade as often as possible, but even though the costs are dropping for capacity, there is no reason to buy more than you actually need.

Once you know the trends in a network, and the typical load on a network connection or device, now comes the tricky part. You need to determine which network connections require upgrades, when those upgrades are needed, which of your network devices require upgrades and when those upgrades are needed.

The first thing you should do is to see if you have any "unnecessary" traffic, that you could remove or reschedule. For instance, if you have a database run or a backup process that is creating a lot of traffic, you should check if you can move that traffic to some other time where there is less load on your network. You should also check if you have a network connections that are not utilized, or that are underutilized. For instance, you may have a network connection to an office that have now been shut down. Even if the contract for the network connection has not expired yet, you should contact your service provider and ask if you can remove that connection and receive credit for it. Most service providers will agree to this. Just make sure that you don't remove or change any network connections that could affect the redundancy of your network.

The next thing you should do is to estimate how much network capacity you will need for your connections for the next 18 months. There is really no need to look further into the future, because you do not wish to have a contract on your network connections for a longer time than 12 to 18 months. This is very important, because despite the fact that your contract for e.g. 3 years will be less expensive per month than your 18 month contract, the cost will be bigger in the long term. This is due to the fact that the bandwidth costs are dropping so fast that once you renegotiate your contract, the costs will have dropped so much that the total cost will be smaller if you write short term contracts than if you write long term contracts.

Your service provider will probably want to sell you longer term contracts, and your accounting department might also want this, because most things get more expensive with time, but bandwidth is an exception.

Another advantage with short term contracts is that it is simpler to implement changes in your network. If you have a few months left on your contract, the cost to drop that connection is far less than if you have a few years left. Furthermore, if you should happen to run out of capacity because of higher growth than you expected, there is never any problem to upgrade your connection. No service provider will say no to customer that wishes to upgrade a connection, but if prices have dropped a lot, and you have a long term left on your contract, you may get a worse price than if you have a short term left.

As for network devices, it is often a good thing to lease these from your service provider. That way you will not need to worry about buying devices that you can upgrade when you need to upgrade your network connections, your service provider will handle this for you. If you are upgrading your network connections every 18 months, it is often too expensive to buy new devices every time, so make sure that you have modular devices where you can upgrade your line cards when needed.

If you buy your own network devices, make sure that the devices can grow with your network connections, and that the devices you buy last for at least 3 to 5 years. Buying modular devices, where you can upgrade the line cards when needed and possible also other parts, like the back plane.

Another thing to consider is that you could retire your high-speed devices into medium-speed devices and so on. You could e.g. use your former core devices as distribution devices and your former distribution devices as access devices and so on. Consider these things before you buy new equipment. Most equipment manufacturers also offer buy-back options, where they buy back some of your old equipment when you upgrade.

Rules of thumb:
- Keep track of your bandwidth usage statistics
- Plan the capacity of your network connections for 18 months into the future
- Never write a contract on a network connection for more than 18 months
- Lease your equipment from your service provider if possible
- Make sure the network devices you buy have a lifetime in your network of 3 to 5 years