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We've observed the bottleneck to be an upper limit on packets/sec for a given instance type. On an m1.large this is about 100k/sec. I believe it's due to the virtual NIC just not being fast enough to handle high traffic loads.

The rightscale folks found the same thing:

http://blog.rightscale.com/2010/04/01/benchmarking-load-bala...



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