Suppose we have a 1G memory, and are allocating blocks in the range from 50M to 300M. Initially filled with several partitions. Then, P2 exits, and another partition is started. Now, P4 goes, after which, three more are started. Now, P1, P5 and P10 finish, and other partitions are created instead. And then some other stuff happened... We now have 94M unused, but the largest unused block is 35M, which is insufficient for any new partition. This is called external fragmentation.