What does it mean for a system to be scalable?

Scalability is an attribute that describes the ability of a process, network, software or organization to grow and manage increased demand. A system, business or software that is described as scalable has an advantage because it is more adaptable to the changing needs or demands of its users or clients.

Scalability is often a sign of stability and competitiveness, as it means the network, system, software or organization is ready to handle the influx of demand, increased productivity, trends, changing needs and even presence or introduction of new competitors.

To further understand scalability, here are two examples. First, a basic anti-virus program can become premium and be used by enterprises through downloading certain add-ons or paying for subscription. Because more resources may be added to it, it is considered scalable. On the other hand, more computers and servers can be added to a network in order to increase throughput or intensify security. This makes the network scalable.

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Scalability is the ability for IT systems – such as applications, storage, databases and networking – to continue to function properly when changed in size or volume. It often refers to increasing or decreasing resources as needed to meet the higher or lower demands of a business.

Vertical (scale-up) scalability increases the capacity of hardware or software by adding resources to a physical system, such as adding processing power to a server to make it faster. For scale-up storage, this means adding more devices, such as disk drives, to an existing system when more capacity is required.

Horizontal (scale-out) scalability connects multiple items in order to work as a single logical unit. For scale-out storage, this means adding devices in connected arrays or clusters. Each cluster can have many nodes (devices), and nodes can be separated geographically. Scale-out NAS (network-attached storage) grows by adding clustered nodes. Because each node includes storage capacity, processing power and I/O (input/output) bandwidth, performance increases along with storage capacity. In a scale-out storage system, new hardware can be added and configured as the need arises. When a scale-out system reaches its storage limit, another array can be added to expand the system capacity. Scale-out storage can use the added storage across arrays. A scale-out architecture allows the initial storage investment to be small, because future storage can be added as needed.

Software-defined storage (SDS) creates a virtualized network of storage resources by separating the management software from its underlying storage hardware. SDS resources may be spread across multiple servers and shared as if they reside on one physical device. This type of storage enables unlimited scalability on demand. SUSE Enterprise Storage is an SDS solution that provides limitless storage capacity and scalability.

Scalability refers to the ability of an organization (or a system, such as a computer network) to perform well under an increased or expanding workload. A system that scales well will be able to maintain or increase its level of performance even as it is tested by larger and larger operational demands.

In financial markets, scalability describes an institution's ability to handle increased market demands; in the corporate world, a scalable company is one that can maintain or improve its profit margins while sales volume increases.

• Scalability describes an organization's capacity to adapt to increased workload or market demands.
• A scalable firm is able to quickly ramp up production to meet demand and at the same time benefit from economies of scale.
• Scalability has become increasingly relevant in recent years as technology has made it easier to acquire more customers and expand markets globally.

Scalability, whether in a financial context or within the context of business strategy, refers to an organization's ability to grow without being hampered by its structure or available resources when faced with increased production. The idea of scalability has become more and more relevant in recent years as technology has made it easier to acquire customers, expand markets, and scale up.

This concept is closely related to the term economies of scale, in which a company is able to reduce its production costs and increase profitability when it produces more of a given product. In effect it is spreading production costs over a greater number of units, making each of them less expensive to produce. By contrast, if increased production leads to greater costs and lower profits, that's known as diseconomies of scale.

According to a study by the management consulting firm McKinsey & Company, "While most companies tend to focus on launching new businesses, the real value comes from being able to scale them up. Based on an analysis of U.S. venture-capital (VC) data, two-thirds of value is created when a company scales up to penetrate a significant portion of the target market."

Some tech companies have an amazing ability to scale quickly, putting them in the coveted category of high-growth enterprises. The reason can be a lack of physical inventory and a software-as-a-service (SaaS) model of producing and delivering goods and services. Companies with low operating overhead and little to no burden of warehousing or maintaining an inventory don't need a lot of resources or infrastructure to grow rapidly.

Even companies that are not directly related to the technology industry have a greater ability to scale up by taking advantage of current technologies.

Customer acquisition through the use of tools like digital advertising has become a lot easier and far less expensive. Banks, for example, can use digital advertising strategies to increase sign-ups for online banking services, expanding their customer base and revenue potential.

Other technologies that help with scaling include labor-saving innovations such as automated warehouse management systems used by large retailers like Amazon and Walmart.

At its core, a scalable business is one that focuses on the implementation of processes that lead to an efficient operation. The workflow and structure of the business allow for scalability.

Scalable companies tend to have an established group of leaders, including C-level executives, investors, and advisors, to provide strategy and direction for successful growth. Scalable businesses also have consistent brand messaging across their divisions and locations. A lack of brand enforcement sometimes causes companies to lose sight of their core value, thus decreasing scalability. Yahoo is an example of this. After the company scaled up quickly, it lost sight of its core business and suffered as a result.

A scalable company also has effective tools for measurement, so the entire business can be assessed and managed at each level. This management leads to the efficient operations described above and helps with capital budgeting.

To scale—or scale up—a business means growing it in such a way that its revenues increasingly outpace its costs.

A scale-up often refers to a business that has survived its start-up phase, established itself in its market, and moved into an early growth phase.

A high-growth enterprise is one that is successfully scaling up. The Organisation for Economic Cooperation and Development (OECD) defines it as having "an average annualized growth greater than 20% a year, over a 3-year period, and with 10 or more employees at the beginning of the observation period." In its definition, the European Union sets the growth threshold at 10%. The OECD also refers to such businesses as "scalers."

Scalability refers to a business or other entity's capacity to grow to meet increased demand. A business that can scale up successfully should also benefit from economies of scale, where production costs are spread across more units, resulting in higher profit margins.