Do both: each layer and service in an application should be able to manage its own load. Helps prevent cascading failures too. Read up on Netflix's architectur

Do both: each layer and service in an application should be able to manage its own load. Helps prevent cascading failures too. Read up on Netflix's architecture, where they've talked about this a lot. And the book "Release It!: Design and Deploy Production-Ready Software" (Nygard), though Java-oriented in its examples, covers the concepts well.