Ethernet it self is a shared media

Ethernet it self is a shared media, so there are rules for sending packets to avoid conflicts and protect data integrity. Nodes on an Ethernet network send packets when they determine the network is not in use. It is possible that two nodes at different locations could try to send data at the same time. When both PCs are transferring a packet to the network at the same time, a collision will result. Both packets are retransmitted, adding to the traffic problem. Minimizing collisions is a crucial element in the design and operation of networks. Increased collisions are often the result of too many users or too much traffic on the network, which results in a lot of contention for network bandwidth. This can slow the performance of the network from the users point of view. Segmenting, where a network is divided into different pieces joined together logically with switches or routers, reduces congestion in an overcrowded network.

Collision rates measure the percentage of packets that are collisions. Some collisions are inevitable, with less than 10% common in well running networks.

Utilization rate is another widely accessible statistic about the health of a network. This statistic is available in Novell's Console monitor and WindowsNT performance monitor as well as any optional LAN analysis software. Utilization in an average network above 35% indicates potential problems. This 35% utilization is near optimum, but some networks experience higher or lower utilization optimums due to factors such as packet size and peak load deviation.

A switch is said to work at "wire speed" if it has enough processing power to handle full ethernet speed at minimum packet sizes. Most switches on the market are well ahead of network traffic capabilities supporting full "wire speed" of ethernet, 14,480 pps (packets per second).