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Q1-1 Why Is Introduction to MIS the Most Important Class in the Business School?

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Figure 1-1
computer Price/Performance
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in these areas are being held back because the cost of buying sufficient processing power is so high.
But the good news is that the cost of processing is dropping—rapidly.
Metcalfe’s Law

Another fundamental force that is changing digital devices is Metcalfe’s Law, named after Robert
Metcalfe, the inventor of Ethernet. Metcalfe’s Law states that the value of a network is equal
to the square of the number of users connected to it. In other words, as more digital devices are
3
connected together, the value of that network will increase. See Figure 1-2. Metcalfe’s Law can
be clearly seen in the dramatic rise of the Internet in the 1990s. As more users gained access
to the Internet, it became more valuable. The dot-com boom ushered in tech giants like Google,
Amazon, and eBay. None of these companies would have existed without large numbers of users
connected to the Internet.
Metcalfe’s Law isn’t lost on tech companies, either. Google’s Project Loon is a major effort
to bring Internet access to everyone on the planet using a network of inflated balloons floating
around the world. One of the primary metrics for social media companies is the number of monthly

Value of
Network

Figure 1-2 2 3 4 5 6
Increasing Value of networks Number of Network Nodes