Disclosed is a method and apparatus for performing capacity planning and resource optimization in a distributed system. In particular, the capacity needs of individual components (e.g., server, operating system, CPU, application software, memory, networking device, storage device, etc.) in a distributed system can±>e analyzed using relationships between measurements collected from the distributed system. These relationships, called invariants, do not change over time. From these measurements, a network of invariants are determined. The network of invariants characterize the relationships between the measurements. The capacity need of at least one component in the distributed system can be determined from the network of invariants.