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Metcalfe’s Law

20 一月, 2016 - 15:30

How useful is a piece of technology? The answer depends entirely on how many other users of the technology there are and on how easily they can be interconnected. For example, the first organization with a facsimile machine had no one to fax to, and no one to receive faxes from! One telephone is useless; a few telephones have limited value. Many millions of telephones create a vast network. These effects are known as Metcalfe's law. Robert Metcalfe, founder of Novell, 3COM Corporation and the designer of the robust Ethernet protocol for computer networks observed that new technologies are valuable only if many people use them. Roughly, the usefulness, or utility of the network equals the square of the number of users, the function known as Metcalfe's Law. This is illustrated in the simple line graph in Figure 10.3.

The more people who use software, a network, a particular standard, a game, or a book, or indeed a language such as English, the more valuable it becomes and the more new users it will attract. This in turn increases both its utility and the speed of its adoption by still more users. The Internet is perhaps the best illustration of Metcalfe's law. While it began in the 1960s, it is only in the past dozen years that it has gained momentum - as more users joined the medium it became more useful to even more users, thus accelerating its growth. Now its potential to spread new ideas, products and services is awesome. Other good examples of Metcalfe’s Law in recent years have been cellular telephones and the ubiquitous Palm digital assistant. In the case of the latter for example, most early adopters recommended the product to friends and colleagues, and the Palm succeeded not because of a large advertising budget but because of word-of-mouth. The early adopters insisted that others buy the product not just because it was good, but because it increased the size of their network, which made their own Palms more useful. One of the key factors in this success was the Palm’s ability to “beam” to other Palms via a built-in infra-red device. Palm users were proud not to carry paper business cards, and preferred to beam their details to others.

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Figure 10.3 Metcalfe's Law 
 

Networks are important because they create short cuts. Anyone who is part of the network can contact anyone else who is part of it, and bypass more traditional channels and structures. This is important for planners who should consider what the effects of technology will be that enables their customers to talk to each other, suppliers to talk to each other, and customers to talk directly with suppliers, wherever in the world they may be. As networks grow, their utility increases, so Metcalfe’s Law tells us – this is true for those who are part of the network, and for those who then choose to join it.