By Simon Bond

Global markets will look far different in five years time, way more different than they did five years ago.

Moore's law refers to an observation made by Intel co-founder, Gordon Moore, in 1965. He noticed that the number of transistors per square inch on integrated circuits had doubled every year since their invention. Moore's law predicts that this trend will continue into the foreseeable future. Although the pace has slowed, the number of transistors per square inch has since doubled approximately every 18 months. This is used as the current definition of Moore's law.

Nielsen’s Law is Moore’s law applied to Network bandwidth. More specifically, it states that high-end internet connections grow at 50% per year, or slightly slower than Moore’s law. To simplify; say a business or institution has a current connection of 100mb, according to Nielsen’s law, in five years time, that capacity will have grown to 760mb. With that sort of connectivity growth, the possibilities for education, healthcare, global commerce and trade to name a few are endless.

So why is bandwidth more important than computing capacity? Before the internet came along, the only way to build a more powerful computer was to fit more transistors into a smaller space. To handle large amounts of data, business machines often had to be the size of a room, which is obviously prohibitively large for personal computing. Moore’s law rapidly made them smaller, cheaper, and more powerful. But recently, we reached a critical tipping point where network connections were largely good enough to bring cloud computing to the masses.

You can still make a computer work faster by filling it with more chips, but you can also make it faster by hooking it up to a bigger, faster, more optimally configured computer on a server farm in New Zealand, New Hampshire, in fact, pretty much anywhere you like. The future of connectivity may simply rest in the browser via the cloud.

In other words, Nielsen’s law has brought scalability to computing.

In today’s world, a computer is only as good as its internet connection. Moore’s law may soon allow every child on the planet to afford access to a computer, but more importantly, Nielsen’s law will connect them to the global ecosystem, creating (mostly) positive network externalities for everyone involved. 

That means a more connected, better educated global population, but it also means a bigger addressable market for internet companies. 

The value shift from the tangible to the intangible will therefore continue.