Metcalfe's Law, Zipf's Law, and the Value of Networked Data

August 15, 2014

The phrase "Internet of Things" is everywhere now. In fact it's probably in the running for the most overused phrase of 2014. I believe whole-heartedly in the value of distributing data and connecting machines together, but I think that we should look beyond the hype.


I attended a speech last week where the speaker, a very respected Fortune 50 executive spoke enthusiastically of Metcalfe's Law. Metcalfe's Law, in short, states that the value of a network is proportional to the square of the number of nodes. He used this principal to assign an astronomical value to the internet of things - many times the value of the internet itself. Intuitively, Metcalfe's Law just doesn't make sense to me in the context of test and manufacturing data so I set off to investigate. My search led me to Zipf's Law which says that the value of a network is proportional to n x log(n) where n = number of  nodes. This article: "Metcalfe's Law is Wrong" from IEEE Spectrum has a nice comparison of Metcalfe's Law vs. Zipf's Law. 


As I said, I'm a strong believer in the value of networking and distributing data. Making test data, machine performance data, and predictive monitoring data available to the right people and systems at the right time wherever they may be is changing the world. Distributed computing is bringing huge value to organziations around the globe. In fact, there is so much value to be derived, that we don't need to overhype the value - let's try to keep it in perspective. The best way forward is to focus on connecting the right nodes for a real purpose and not just more nodes simply for the sake of connecting them.


- Kamal


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