How big are the schools? I'm measuring concurrent users to be "clicked something within the last two seconds", as our httpd processes live for two seconds. On our largest Moodle install we have about 11,000 user accounts, out of which maybe 8,000 have been somewhat active. Out of those around 4,500 log in on a given week and 2,500 on a given day. During busy hours we might have around 1,000 users logged in, but still we rarely see spikes over 100 concurrent users. The web server is configured to allow only max 175 processes, and it has been enough for us. You can put this amount of users in just one server, if it's big enough (like 4 quad core processors + 16 gigs of memory with a fast IO system and lots of bandwith).
The point of these numbers was, as Howard pointed also, that the number of concurrent users is probably significantly less than the number of "active" users.
For us, the database is the bottleneck and we have to buy a bigger box for it. This is due to the large number of courses (3,000+) that we have and the course enrolments with them (~70,000). These generate a lot of db queries for each login, role assignment and so on.
Another thing is the size of the log table. Optimized they might be, most database operations still have a point were they get slower fast, even though with smaller tables you never noticed a performance hit.
Hardware and performance
How many moodle installs on a server?
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