The Internet is a giant network of many smaller computer networks throughout the world. Its power and value stems from the fact that it connects millions of people. As more organizations and individuals use the Internet, the cost to access it decreases and more funds are invested that ultimately advance Internet technologies and infrastructure. If only a few people had access to the connections that form the Internet, its power and value would decrease significantly. The same could be said of many other technologies, including the telephone and television networks. In order for society to benefit from them, these tools must be used by more than just a handful of people. This concept is at the heart of Metcalfe's Law.
Metcalfe's Law is named after an observation of Robert Metcalfe, who founded 3Com Corp. in 1981 and played a major role in discovering and designing Ethernet technology—a leading way to access local area networks (LAN). Author George Gilder applied the term Metcalfe's Law to Metcalfe's observation in his 1993 article "Telecosm: Metcalfe's Law and Legacy," which was published in Forbes ASAP. According to 3Com, Metcalfe's Law "states that the economic value of a network increases like the square of the number of its nodes, or the law of increasing returns. Usually, when people share a piece of equipment, the return diminishes. When more people are engaged in the network, more value is returned to the user."
Gilder, George. "Telecosm: Metcalfe's Law and Legacy." Forbes ASAP, September 13, 1993.
Metcalfe, Bob. "Metcalfe's Law: A Network Becomes More Valuable as it Reaches More Users." InfoWorld, October 2, 1995.
"Metcalfe's Law." Tech Encyclopedia, May 30, 2001. Available from www.techweb.com/encyclopedia.
SEE ALSO: Moore's Law