scalable

adjective scal·able \ ˈskā-lə-bəl \
Updated on: 5 Dec 2017

Definition of scalable

1 : capable of being scaled
2 : capable of being easily expanded or upgraded on demand
  • a scalable computer network

scalability

play \ˌskā-lə-ˈbi-lə-tē\ noun

Recent Examples of scalable from the Web

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'scalable.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of scalable

circa 1580

Other Computer-Related Terms


Financial Definition of SCALABLE

scalability

What It Is

Scalability refers to a company's ability to increase its production profitably.

How It Works

Let's assume it costs Company XYZ $1 million to produce 1 million widgets per year ($1 per widget). This $1 million cost includes $500,000 of administrative, insurance and marketing expenses, which are generally fixed. If Company XYZ decides to produce 2 million widgets next year, its total production costs may only rise to $1.5 million ($0.75 per widget) because it can spread its fixed costs over more units. This means Company XYZ has scalability. Although Company XYZ's total costs increase from $1 million to $1.5 million, each widget becomes less expensive to produce and therefore more profitable.

The idea of scalability is based on economies of scale, which refers to the reduction of per-unit costs through an increase in production volume.

Why It Matters

Operational efficiencies create scalability. These efficiencies often are the result of division or specialization of labor, reorganization of key processes, the implementation of new technology, and bulk materials purchases.

Scalability is a huge competitive advantage. A lack of it can discourage new competitors from entering a market or eliminate smaller competitors. This is why it can lead to an oligopoly, where only a few companies produce the majority of an industry's output. Sometimes scalability can even lead one company to dominate an industry; this is called a natural monopoly.


SCALABLE Defined for English Language Learners

scalable

adjective

Definition of scalable for English Language Learners

  • : easy to make larger, more powerful, etc.



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