Wednesday, July 07, 2004

Network (counter) effect

We all know - shouldn't we?- what is the "network effect", that it's the value of a network grows proportionately to the square of the number of users. Bob Metcalfe coined this famous law (know as Metcalfe’s Law).
Knowing that people prefer knowable over unknowable risks I was wondering how this affects Open Source Software.

A monopolistic position from the network effect like Microsoft's gives competitors, like Linux's (with a smaller network) trouble enticing customers to join its alternative network because it offers lower network value. Why? Because PC users value the ability to exchange files with other users without risk of compatibility problems. Of two choices, Windows or Linux, which give the lower unknowable risks dowside? For sure, it is biased since more people know Windows, so Windows' bugs are well known. Linux's bugs is like struggeling alone in a swamp of alligators. Really so threathful? bah, when you don't know everything's possible.

The large base of Windows users drives application developers to tailor their products to Microsoft first. This also creates greater value for the users of the dominant network. A network full of prorietary softwares. And despite what you may think of proprietary softwares, it will be always at the bleeding edge - as a matter of fact, paid developpers team will outbeat any voluntary progammer remote group. At least until they stop innovating, or new features stop to be useful - then open software can close the gap and win.

Network (counter) effect isn't a small disadvantage when trying to get new users to your (alternate) own network. Open source does gain power with the network effect, for sure. In other words, sometimes the Linux network, however large, produces little value, at least not enough (yet) to supperseeds Windows' one. We shall come back later to that subject...


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