Monday, November 06, 2006

Metcalf's Law

This month's IEEE Spectrum reported on a discussion that might be of some (theoretical) interest to some of us at SIS. I have blogged about it here (and I don't want to repeat myself).

In case you have never heard of Metcalf's Law before, it is often mentioned in the same context as Moore's Law. Instead of applying to semiconductors and being a function of time, Metcalf's Law applies to networks and relates value as a function of size. In his original presentation, Metcalf was arguing that the value of networks grow exponentially with size while costs grow linearly. Thus, providers of network systems (and it doesn't have to be technology-based networks) must invest until value begins exceeding costs. After that, the critical mass, the network system becomes an easier value proposition.

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