- Moore's law (CPU power doubles every 18 months)
- Gilder's law (Fiber bandwidth triples every 12 months)
- Storage capacity doubles every 12 months (is this called Storage law?)
Now consider some of the business dynamics based on network effects:
- Metcalfe's law: Value of a network is the square of the number of users (think LinkedIn, your very own Ning network etc)
- Power law: Proverbial long-tail and the so called "Freemium" business model (i.e free software == zero cost marketing), you pay when you need extra services.
Open Source software + Cloud compute model helps with Economies of Scope (i.e breadth of activities you need to handle in a profitable way) in an unprecedented way: you just don't worry about IT needs in the traditional manner anymore.
Meanwhile HW innovation trends discussed above + Network effects + Cloud compute model can also help with Economies of Scale (e.g. pay as you go model with AWS) by letting you build on a business model with miniscule "conversion rates" off of a very large online customer base.
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