If you are using ASP.NET Web Services (asmx) then it would spawn a new instance of your web service class for each request. In case WCF based web services, you can control the instancing /concurrency using attributes/configuartion (see this article ) - you have three instancing modes possible - per call, per session and singleton.
Normally Windows XP and Windows 7 have a limit of 10 concurrent TCP/IP connections. Maybe that's it. Be sure to work in a windows server version.
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