TCP offload engine (TOE) is a technology used in some network interface cards (NIC) to offload processing of the entire TCP/IP stack to the network controller. It is primarily used with high-speed network interfaces, such as gigabit Ethernet and 10 Gigabit Ethernet, where processing overhead of the network stack becomes significant. TOEs are often used as a way to reduce the overhead associated with Internet Protocol (IP) storage protocols such as iSCSI and Network File System (NFS).

Originally TCP was designed for unreliable low speed networks (such as early dial-up modems) but with the growth of the Internet in terms of backbone transmission speeds (using Optical Carrier, Gigabit Ethernet and 10 Gigabit Ethernet links) and faster and more reliable access mechanisms (such as DSL and cable modems) it is frequently used in data centers and desktop PC environments at speeds of over 1 Gigabit per second. At these speeds the TCP software implementations on host systems require significant computing power. In the early 2000s, full-duplex gigabit TCP communication could consume more than 80% of a 2.4 GHz Pentium 4 processor, resulting in small or no processing resources left for the applications to run on the system.

TCP is a connection-oriented protocol which adds complexity and processing overhead. These aspects include:

Moving some or all of these functions to dedicated hardware, a TCP offload engine, frees the system's main CPU for other tasks.

A generally accepted rule of thumb is that 1 Hertz of CPU processing is required to send or receive 1 bit/s of TCP/IP. For example, 5 Gbit/s (625 MB/s) of network traffic requires 5 GHz of CPU processing. This implies that 2 entire cores of a 2.5 GHz multi-core processor will be required to handle the TCP/IP processing associated with 5 Gbit/s of TCP/IP traffic. Since Ethernet (10GE in this example) is bidirectional, it is possible to send and receive 10 Gbit/s (for an aggregate throughput of 20 Gbit/s). Using the 1 Hz/(bit/s) rule this equates to eight 2.5 GHz cores.

Many of the CPU cycles used for TCP/IP processing are freed-up by TCP/IP offload and may be used by the CPU (usually a server CPU) to perform other tasks such as file system processing (in a file server) or indexing (in a backup media server). In other words, a server with TCP/IP offload can do more server work than a server without TCP/IP offload NICs.

In addition to the protocol overhead that TOE can address, it can also address some architectural issues that affect a large percentage of host based (server and PC) endpoints. Many older end point hosts are PCI bus based, which provides a standard interface for the addition of certain peripherals such as Network Interfaces to Servers and PCs. PCI is inefficient for transferring small bursts of data from main memory, across the PCI bus to the network interface ICs, but its efficiency improves as the data burst size increases. Within the TCP protocol, a large number of small packets are created (e.g. acknowledgements) and as these are typically generated on the host CPU and transmitted across the PCI bus and out the network physical interface, this impacts the host computer IO throughput.

A TOE solution, located on the network interface, is located on the other side of the PCI bus from the CPU host so it can address this I/O efficiency issue, as the data to be sent across the TCP connection can be sent to the TOE from the CPU across the PCI bus using large data burst sizes with none of the smaller TCP packets having to traverse the PCI bus.