The Value of Capacity Planning

As the demand for your website or product changes, so will your hosting capacity needs. Do you have a strategy in place for your capacity planning?

Capacity planning for your hosting relates to your estimations of, or reactions to, the requirements of your own resources. Some strategies allow for unexpected demands and future growth, whereas other strategies are more reactive, simply adding resource as and when required. Let us look at the different strategies your business might adopt. You probably already use one of these strategies for your hosting, even if you do not realise it! See if you can identify which of these you currently fall under, and if this is right for you, or whether there might be a better way.

Lead Strategy

Adopting a “lead” strategy relates to purchasing a hosting package that, rather than being based on your current needs, allows for additional capacity for future expansion. Essentially, it means starting out with the future in mind, with much more headroom than you might need at the beginning. The benefit of this is that you are pre-empting your future growth and any unexpected demands for your hosting, because you have “ready-made” extra resource for such an occurrence and therefore you will likely avoid any unexpected interruptions to your service caused by capacity issues. This is somewhat of an aggressive strategy, and the downside is that it involves a larger upfront investment, and depending on when your growth takes place, you may end up paying for resources you do not need for a while.

Lag Strategy

Even though the name of this approach makes it sound somewhat lacklustre, this may in fact be an appropriate strategy for some!  A “lag” strategy means only increasing the resources of your hosting when there is a clear and immediate reason for doing so. You purchase hosting that fulfils your exact requirements as they are for the moment, and stick with these until such a time that the increase in demand leaves you with little option but to increase your capacity. The benefit of this means that you are never paying for more hosting than you need. However, this is a very conservative and passive approach to hosting, and the flaw lies in the fact it usually takes a critical incident or a period of poor performance before the increase in resource is put in place.

Match Strategy

Match Strategy is unique in that it sits somewhere in the middle of a Lead and Lag strategy. It is one of the most carefully planned and precise strategies and places practically equal importance on both performance and cost. Match strategy refers to adding more resources in small increments as your server approaches capacity, always avoiding full capacity being reached. For example, your strategy may be to add more resources to your server as usage or disk space approaches 90%. This strategy means that both performance issues and cost are kept to a minimum. The downside to this is that it is still a reactive strategy and therefore may not be effective against a sudden or unexpected increase in demand.

Adjustment Strategy

An adjustment strategy refers to adding or reducing resources based on demand and is often determined using historical forecasting. This works well for companies whose demand has seasonal fluctuations. Having a scalable solution such as a cloud server works well in this scenario, as resources can be scaled as required. The downside to this scenario means that the hosting needs may need to be constantly reviewed and forecasted for so it can be harder and more time consuming to maintain this strategy’s true effectiveness.

So now you know about the different approaches to capacity planning, take a look at the following four scenarios, and see which of these you think would be the best strategy to apply.

Scenario 1: A company has purchased a cloud server to host a website on behalf of a very popular festival taking place in the summer. They needed their hosting set up well in advance to advertise but tickets do not go on sale for another few months. However, they know that when the tickets go on sale, they will experience very high traffic on their site from people desperate to purchase tickets before they sell out. So for this period in particular they will need their site to perform well to cope with the increased demand. What should they do?

Scenario 2: This company is growing and they need to expand their workforce. All of their employees are going to work from a central CRM running from a server they wish to purchase from a local hosting company. They know that as users increase on the server they will likely need to increase their resources. The company’s salary costs have risen due to all those new employees they’re paying now, so it’s important to them to keep their hosting costs as low as they can be. However, the CRM is a mission critical part of their business, and they cannot afford to experience any performance issues or downtime on the server. Which strategy would be best for them?

Scenario 3: A small community run theatre group relies on donations from local residents and businesses to operate. As such, money is tight, but they would like to maintain an online presence by having a simple website, which explains a little about themselves and contains a blog documenting their recent activities. However no business or fundraising is to be done through the website, and they will mostly rely on local word of mouth and social media as a means of advertising. What would their best option be?

Scenario 4: An already well-known and established makeup brand has collaborated with an infamous, internationally successful musician to launch a full range of beauty products. The products will be sold exclusively on a brand new standalone website that the makeup brand is launching especially. They know that due to their combined popularity that high, ongoing demand for the products is a certainty. The product launches soon, and is expected to reach extraordinary levels of demand. The makeup brand’s own reputation and relationship with their musician partner is staked on this website. They simply can’t afford for the site to go down for such an important launch, or indeed at any time in the future. What should they do?

We hope you enjoyed guessing what the right strategies were for the above scenarios! Check below to see how many you got right!

Scenario 1 Answer: If you guessed that Adjustment Strategy would be the best one to adopt here, you were correct! In this scenario, it would be best for the company to plan an increase to the cloud resources a little before the sale date, ideally based on forecasting they have done using demand in previous years. Once the rush for tickets is over, they may wish to revert back to a more appropriate level of resource until next year.

Scenario 2 Answer: Hopefully you guessed that the correct answer to this scenario was to adopt a Match Strategy to hosting. This company are equally concerned about cost and performance, so they need a strategy that doesn’t neglect either one. Therefore, adding resource in small increments as they approach a higher usage level will both ensure that none of their users are adversely affected by performance issues, and will also keep their costs as low as possible.

Scenario 3 Answer: Did you guess that the best strategy here was Lag Strategy? Well done! This community group needs to keep a tight grip on their purse strings due to their variable and unpredictable income. It’s clear that they need to use what cash they have to stay operational, and as their website isn’t critical to them doing so, it doesn’t make sense to spend a penny more than they need to on this. If the group gets more popular or if their website becomes more important to them in future, they may need to review it but for now, it would be best to leave it as it is!

Scenario 4 Answer: And last but not least, of course this one was Lead Strategy! This company needs to prepare as much as possible for the predicted astronomical demand to their new website, and on launching a brand new range that they have staked their reputation on, availability of the site is absolutely critical. As they know the high demand for their product is a certainty, there is minimal risk (but a potentially huge benefit) involved in a larger upfront investment, so they need to choose a hosting solution robust enough to cope with this from the start.

How many did you get right? Are there any you disagree with? Maybe you are rethinking your own capacity planning strategies? If you are not sure about the type of capacity planning your business should be adopting, or if you want to talk to us about hosting that caters for your future growth, get in touch today to speak to one of our friendly hosting specialists who will be able to guide you through your options.