Moore's Law and Metcalfe's Law

Moore's Law

Gordon Moore, founder of Intel Corporation, based his business on the law that he enunciated. Moore's Law states that every 18 months, processing power doubles while cost holds constant. Moore's insight proved prescient. His law has been true through the years, and it appears that it will remain true for the foreseeable future. Telecommunications bandwidth and computer memory and storage capacity are experiencing a similar fate. This makes it very affordable for individuals and small businesses to be equipped with the electronic means to conduct commerce and transfer information as fast and freely as large corporations can.

Metcalfe's Law

Robert Metcalfe, founder of 3Com Corporation and designer of the Ethernet protocol for computer networks, states that the usefulness, or utility, of a network equals the square of the number of users.

The telephone is of very limited use if only you and your best friend have one. If a whole town is on the system, it becomes much more useful. If the whole world is wired, the utility of the system is phenomenal. But in the predigital age, it could take many years for Metcalfe's Law to bear fruit. It was not until 1931 that telephone companies put a dial on the instrument, finally cutting the tremendous cost of employing switchboard operators and extending the reach of the system. First, telephone use had to reach a critical mass, or number, of users. So it is with any technology.

Until a critical mass of users is reached, a change in technology only affects the technology. But once critical mass is attained, social, political, and economic systems change.