Metcalfe’s Law

You have likely heard of Moore’s Law. It is usually stated as:

Computer power will double every eighteen months.

Here is another one, Metcalfe’s Law. Simply stated it is:

The value of a network is proportional to the square of the number of connected users of the system.

Too geeky for you? The essential observation is that the more connected a network is the greater the value to the users. And this is the important part, the value increases at a higher rate than the number of users.

Bear with me for some quick math:

If there are just two users the value could be stated as 2 squared or 4. Great, now let’s double the users to four. Will the value double? No, it is now 4 squared or 16. Eight users has a value of 64 and so on.

What’s the point?

It is not the computer (stupid) it is the network.

Having a computer in the office is an essential first step to create and store digital data. However that data and that system has much (in fact much much) more value when it is part of a network. This starts with simply connecting machines in the office to share information from the back to the front. Next you can share data online for e-claims, patient communications, interactive web sites and a host of new e-services.

It is these two ideas together, Moore and Metcalfe; exponentially faster computers connected to exponentially better networks, which is driving the amazing changes we see in our world.

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