Capacity utilization

What is capacity utilization?
Capacity utilization is a business term that is sometimes applied to IT to enable efficient use of resources. Industry experts use the term 'capacity utilization rate' to show how well existing resources are being used or what percentage they are being drawn.

A good example of capacity utilization in IT are virtualized hardware and network environments. In such environments, system administrators first create a network and then use logical partitioning to divide it into virtual machines and components, rather than setting up and connecting physical devices. They then allocate resources such as CPU and memory to a central pool, depending on what a virtual machine needs. Here, the capacity utilization is the amount of central resources, whether they process energy, storage or another resource that are used efficiently by the system.

In general, capacity utilization can relate to any resource and its function within an IT system. This will be an important metric for many CIOs and CTOs as they look at how well hardware / software or IT setups are working for the company.