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There is a subtle yet important difference between real time usage vs the allocated view of cloudstack. Allocated capacity refers to the resources reserved by MS whereas real time usage as the name refers is the actual usage (So for storage it is analogous to "df -h" (Linux command)).
Example MS has the following configuration : 2GB RAM, 2GHZ CPU, 10GB storage.
Lets say you choose a service offering of 1GB RAM, 1GHZ CPU and 5gb disk for deploying a vm, MS then reserves these capacities from its physical resources exclusively for this vm. While the vm's "actual usage" might be significantly less (say .1gb RAM , 128MHZ CPU and 1 gb storage) than the allocated(reserved) capacity. Assuming this to be the only vm in the system, the dashboard would display the following values.
Allocated RAM - 1/2 (50%)
Allocated CPU - 1/2 (50%)
Allocated Storage - 5/10 (50%)
Storage Used - 1/10 (10%) (analogous to "df -h" (Linux command))
When you increase the factor, the allocated percentage decreases and hence you can fit in more vms.
Say allocated = 100% = 100gb out of 100gb total space and overprovisioning
factor = 2 and at this moment you can't deploy more vms.
Say you change overprovisioning to 3 and allocated now becomes = 100/150 =
67%, so you can fit more vms.