Moore's Law? How about Metcalfe’s Law for the IoT

Like Moore’s Law for semiconductors, Metcalfe’s Law has been a touchstone in the telecom industry for more than two decades. In its current form, it states that the value of a telecommunications network is proportional to the square of the number of connected users of the system.

Bob Metcalfe co-invented in the 1970s while working at Xerox PARC, and he founded and led 3Com. He formulated the law that bears his name sometime around 1980. At that time, it talked about the number of “compatible communicating devices” rather than the number of users.

The point is the same, however. The more endpoints you have, the more valuable your network becomes. Metcalfe’s Law held true for computer through the 1990s, and we fully expect it to hold true for the Internet of Things (), too.

According to Simona Jankowski of Goldman Sachs, in an October 22, 2014 article in the Harvard Business Review, the Internet of the 1990s connected about a billion PC users. The Internet of the 2000s connected two billion users via smartphones, on its way to six billion. The IoT is expected to connect 28 billion “things” to the Internet by 2020.

Just as computer networking convergence in the 1980s depended on a common, open-standard foundation – including Internet Protocol (IP), Hypertext Markup Language (HTML), and Hypertext Transport Protocol (HTTP) – the same thing must happen for the IoT and the Industrial IoT (IIoT) to achieve its full potential. And, just as with computer networking, the IoT will require that legacy technologies co-exist with modern ones for quite some time.

In general, IoT convergence will be built upon:

  • IP and legacy-to-IP protocol gateways
  • Coexistence of legacy- and Ethernet-heritage : RS485 coexisting with and Gigabit Ethernet
  • Services-layer standards, such as device profiles (akin to HTML and HTTP)
  • Autonomous clusters of devices for reliability and speed, because client/server won’t work in the mission-critical IoT
  • Big data analytics for continuous machine learning, which is where Metcalfe’s law will really kick in because more data means better decisions

To cite just one real-world example, we’re starting to see the convergence of HVAC and lighting systems in commercial buildings as tenants and building owners press for user-centric “adaptive buildings.” This convergence will unlock improvements in quality of life, energy efficiency, productivity, and safety. As more and more buildings join the IoT, according to Metcalfe’s Law, these improvements will only accelerate.

Ron Sege is the Chairman and CEO of Echelon Corp. Previously, he served as President and COO of 3Com. Ron holds an MBA from the Harvard Business School and a bachelor’s degree in economics from Pomona College.

Topics covered in this article