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In this paper we present a hybrid performance model for modeling differentiated service of multi-tier web applications with per-tier concurrency limits, cross-tier interactions, as well as a work-conserving resource allocation model. The service dependencies between multiple tiers are captured first using a layered queueing model. We then show how to model per-tier concurrency limits and service differentiation between multiple classes while maintaining work conservation at each tier. We use a function approximation approach combined with a coupled processor model. Our model is calibrated from an actual multitier J2EE testbed, and we show the ability of the model to accurately model common performance metrics. Our proposed (layered) model shows 78% improvement in root mean square error over a single-tier machine repair model as well as a tandem queue model. We also demonstrate one application of the model for model-based resource allocation.