65534, is the number of ports in use, if you want to configure IIS conncurrent connections follow this,
Increase the connection limit for the Web site.
To do this, follow these steps:
Click Start, point to All Programs, point to Administrative Tools, and then click Internet Information Services (IIS) Manager.
Expand ComputerName, and then expand Web Sites.
Right-click the Web site that you want to configure, and then click Properties.
Click the Performance tab.
Under Web site connections, click Connections limited to, and then type the connection limit that you want to set.
Click OK, and then exit IIS Manager.
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Method 2
Set the connection limit for the Web site to an unlimited number of concurrent connections. To do this, follow these steps:
Click Start, point to All Programs, point to Administrative Tools, and then click Internet Information Services (IIS) Manager.
Expand ComputerName, and then expand Web Sites.
Right-click the Web site that you want to configure, and then click Properties.
Click the Performance tab.
Under Web site connections, click Unlimited.
Click OK, and then exit IIS Manager.
In answer to your other questions
Is there a limit of 65,534 concurrent connections? This is the port list... if you have an IIS server, say listening on port 80 mulitiple transfers from users would happen over this port. the concurrent connections can be configured as above.
Is this limit per server, network card or NLB cluster? limited by license, no max
Could we increase the number of concurrent connections by adding network cards to the servers? in theory no, but would increase the throughput
Is this a limit in Microsoft technology or is it in the TCP/IP protocol? dependent of end server througput, memory etc.. You may be able to get some stats from Microsoft on this.