The Next Network Effect - Software

Failed Internet promises have made us jaded, but it remains a trend that keeps on giving. The nature of big markets is that it typically takes a few generations of trial and error to make technologies easy enough to use for the majority. There are all kinds of We now take the Internet for granted, which is typically a sign that a real market has emerged. We are seeing the network effects of mass connection to the web. We now depend on the Internet for basic communication.

The spike in availability of broadband and wireless access is enhancing the Internet’s value. Right now we have the promise of getting text, video and voice over any network. Of course, we’re not there yet, but convergence is creating a powerful network effect. We will demand more services in more places, enabling real business growth

We still have problems with the wired world. We assume that most major software applications will be a pain to install, implement and maintain. Even successful enterprise deployments have created massive data pools that are barely being used. More applications are being simplified and improved to allow Web access. Linux and other open standards are helping. We may also get to the point where we start to take for granted that software works easily. When we reach this point there should be a significant network effect that dramatically boosts the software business. I would not be surprised to see breakthroughs over the next five years.