Forbes ASAP, September 13, 1993
Metcalfe's Law and Legacy
The world of networks breaks into two polar paradigms. Most familiar is the Public Switched Telephone Network. From the tiniest transistor flip-flop on a modem chip through labyrinthine layers of rising complexity on up to a 4ESS supercomputer switch linking 107,520 telephone trunk lines (itself consisting of millions of interconnected transistors), the public network is a vast, deterministic web of wires and switches. Once you are connected in the public network, your message is guaranteed to get through.
In the public network, bandwidth constantly expands as you rise in the hierarchy. At the bottom are the twisted-pair copper wires of your telephone that function at four kilohertz (thousands of cycles per second). At the top are fiber-optic trunk lines that function at rates close to the 2.9-gigahertz speeds of the electronic transistors that feed the glass wires. In The Geodesic Network, writer Peter Huber has described the five tiers of the telephone switching system as a structure with the solidity, permanence and inflexibility of the Great Pyramid of Cheops, which on paper it resembled. Although the pyramid has suffered erosion and change in recent years, it remains mostly in place today: the public network pyramid.
That is one network paradigm. The other paradigm is Robert Metcalfes. It germinated in his mind in 1970 as he read a paper by Norman Abramson of the University of Hawaii given at a computer conference that year. Abramson told of another paradigm. He called it Aloha. With Aloha, there were no guarantees.
AlohaNet was a packet radio system used for data communications among the Hawaiian Islands. Packets are collections of bits led by a header, which is a smaller collection of bits, bearing an address; they proceed through a communications system rather like envelopes through a postal system. The key feature of AlohaNet was that anyone could send packets to anyone else at any time. You just began transmitting. If you didnt get an acknowledgment back, you knew the message had failed to get through. Presumably your packets had collided with others. In Metcalfes words, They were lost in the ether. At that point, you would simply wait a random period (to avoid a repeat collision as both parties returned to the channel at once). Then you would retransmit your message.
To Metcalfe, AlohaNet seemed a beautifully simple network. But Abramson showed that, because of collisions and other problems, it could exploit only 17 percent of its potential capacity. A student of computer science searching for thesis ideas, Metcalfe believed that by using a form of advanced mathematics called queuing theory he could drastically improve the performance of AlohaNet without damaging its essential elegance and simplicity. What Metcalfe, then a graduate student at Harvard, eventually discovered would bring such networks up toward 90 percent of capacity and make the Aloha concept a serious threat to the entire structure of the public network pyramid.
Metcalfes discovery is known as Ethernet. Twenty years later, Ethernet is the worlds dominant local area network and, at 47, Metcalfe is known and celebrated as its inventor. He was also founder in 1981 of 3Com Corp. of Santa Clara, Calif., the leading producer of Ethernet adapter cards and a major communications products company. In this era of networking, he is the author of what I will call Metcalfes law of the telecosm, showing the magic of interconnections: connect any number, n, of machineswhether computers, phones or even carsand you get n squared potential value. Think of phones without networks or cars without roads. Conversely, imagine the benefits of linking up tens of millions of computers and sense the exponential power of the telecosm.
Indeed, the power of the telecosm reproduces on a larger scaleby interconnecting computersthe exponential yield of the microcosm, a law describing the near magical effect of interconnecting transistors on chips of silicon: As increasing numbers of transistors are packed ever closer together, the transistors run faster, cooler, cheaper and better. Metcalfes law suggests that a similar spiral of gains is available in the telecosm of computer communications.
Already the world economy is beginning to reap these gains. Ethernet now links more than half of the worlds 40 million networked computers, extending Metcalfes paradigm and his law. Indeed, the law would suggest that in addition to his some $20 million of personal net worth from 3Com, Metcalfes concept has fostered scores of billions of dollars in global wealth. Led by Novell Inc., with an equity capitalization of more than $8 billion, the top 15 publicly traded computer networking companies have a total market value of some $22 billion. Add to that sum the productivity value derived from the worlds 100 million computers as they are increasingly linked in networks, and you may sense the power of the Metcalfe paradigm.
Today, 20 years after Metcalfe conceived it at Xeroxs Palo Alto Research Center, Ethernet is still gathering momentum, gaining market share and generating innovations. Between 1989 and 1993, the percentage of Americas computers on LANs rose from less than 10 to more than 60, and most of these gains were in Ethernets.