Technology Drivers of Infrastructure Evolution

STANDARDS AND NETWORK EFFECTS

Today’s enterprise infrastructure and Internet computing would be impossible—both

now and in the future—without agreements among manufacturers and widespread consumer

acceptance of technology standards

• Technology standards:

specifications that establish the compatibility of products and the ability to communicate in a network

• Unleash powerful economies of scale and result in price declines as manufacturers focus on the products built to a single standard

< Without these economies of scale, computing of any sort would be far more expensive than is currently the case>

some important standards that have shaped IT infrastructure

Beginning in the 1990s, corporations started moving toward standard computing and communications platforms.

The Wintel PC with the Windows operating system and Microsoft Office desktop productivity applications became the standard desktop and mobile client computing platform. Widespread adoption of Unix as the enterprise server operating system of choice made possible the replacement of proprietary and expensive mainframe infrastructure. In telecommunications, the Ethernet standard enabled PCs to connect together in small local area networks, and the TCP/IP standard enabled

these LANs to be connected into firmwide networks, and ultimately, to the Internet

Definition of 'Network Effect'

A phenomenon whereby a good or service becomes more valuable when more people use it. The internet is a good example. Initially, there were few users of the internet, and it was of relatively little value to anyone outside of the military and a few research scientists. As more users gained access to the internet, however, there were more and more websites to visit and more people to communicate with. The internet became extremely valuable to its users.

Read more: http://www.investopedia.com/terms/n/network-effect.asp#ixzz2G6EYRwXr

  
 Network effects are sometimes referred to as Metcalfe’s Law, or Network Externalities.

Metcalfe’s Law:

Basics of Network Effects

network effects: The utility of some goods depends on the number of
people using these goods. We distinguish between direct and indirect network effects
 
  § Direct network effects

 result from compatibility between system elements. 
For example, the utility of an e- mail system is increasing with the number of users also using it
Further examples are Internet as well as mobile phone standards.

  § Indirect network effects

assume a positive dependency between the spreading of a technology or a standard and appropriate offers of complementary goods.
 For example, the spreading of an operating system plays an important part in determining the supply of compatible application software. 
Another example is the extensive variety of application programs for Windows.

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