Capacity Overbuilding Dilemma
Cost of extra capacity vs. Cost of upgrading a network
- Upgrading costs 50-80% more (than building it right at the first time)
- Majority complains about being under capacity, not over capacity
Most organizations intentionally overbuild
- Rapid growth in demand
- 5-50% annual growth factor, sometimes 100%
- Difficulty in accurate prediction
Most end up using overcapacity within 3 years
- Turnpike effect: when the network is efficient and provides good service, it becomes heavily used