As we begin the Internet of Everything (IoE) era, more attention is being focused on Metcalfe’s law—a.k.a., the “network effect”—to see if the same rules will apply. Metcalfe’s law states that the value of a network increases proportionately to the square of the number of users. Simply put, networks become exponentially more valuable as the number of users increases.
Recently, Nir Eyal and Sangeet Paul Choudary wrote in TechCrunch about the fading power of the network effect. In their view, it is “stored value” (creative content, reputation, usage data, and influence) produced by users that reinforces the power of the network effect, enabling businesses to retain customers and grow market share.
Nir and Sangeet touch on an important point as we begin to consider the potential power of the Internet of Everything to change our world. Consider this: in Metcalfe’s law “value” comes strictly from increasing the “number” of things on a network. What happens when these things (people, things, and data) bring their own value to the equation?
Essentially, the “value” delivered gets multiplied exponentially by the power of the network effect, creating unprecedented opportunities, giving things that were silent a voice, and waking up nearly anything you can imagine. The Internet of Everything will give us a clearer picture and broader perspective, allowing us to make decisions based on a more accurate view of reality.
But, before we get too excited, it’s important to consider the risks and ramifications of an exponentially more powerful Internet. From my discussions with business and government leaders, technology enthusiasts and futurists, and the general public, people are most concerned about two things: privacy and security.
From a philosophical point of view, the Internet is just a thing. On its own, it isn’t good or bad. It’s what we do with the Internet that will determine the end result. From a technology perspective, the Internet of Everything will provide people with greater knowledge and insights. A good example is how the Internet gave consumers transparency into retailers’ pricing, allowing us to make better, more informed purchasing decisions.
I believe we will do what’s needed and make the right decisions so that the Internet of Everything can fulfill its full potential—whether that is helping businesses increase innovation, showing governments how to become more transparent, or improving the quality of people’s lives. Even so, it is important to be active in shaping the Internet of Everything.
As we enter this exciting new era of the Internet, complete with unimaginable opportunities as well as real risks, I would love to hear your thoughts, ideas, and theories about the Internet of Everything, and especially about its potential impact on our world.
Join the discussion: #IoE and #Internet of Everything