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21 September 2001

MES: The Net Effect

The major driver in manufacturing today, said Kevyn Renner, group manager for worldwide manufacturing market development at Sun Microsystems, is something he calls the Net effect.

Bandwidth + Speed + Network Value = the Net Effect, according to Renner:

Bandwidth is measured by George Gilder's predictions that this millennium will see a billion transistors on a single sliver of silicon, 700 bit streams in a single thread of fiber, and a cellular infrastructure 1,000 times cheaper than today's. Taken together, Gilder said, these phenomenal advances will topple all centralized institutions.

Speed is measured by Moore's Law, which predicted each new chip generation would contain roughly twice as much capacity as its predecessor, and each would be released within 18-24 months of the previous chip. Moore's Law has proved to be remarkably accurate since Intel co-founder Gordon Moore first stated it in 1965. In the 26 years since then, the number of transistors on a chip has increased more than 3,200 times, from 2,300 on the 4004 in 1971 to 7.5 million on the Pentium II processor.

Network Value is measured by Ethernet inventor and 3Com founder Robert Metcalfe. Metcalfe's Law states a particular variant of the economics of increasing returns: The more units of a network in operation, the more the value of each unit (and the whole), and this rise occurs exponentially.