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Chapter 1 The Importance of MIS
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active users (MAU) using their social network. The more people they can get in their network, the
more their company will be worth. And look at the network effects of using products like Microsoft
Word. Why do you pay for Microsoft Word when you could use a free word processor like LibreOffice
Writer? You pay for Microsoft Word because everyone else uses it.

Other Forces Pushing Digital Change

And it’s not just the number of users on the network that’s changing the way we use digi-
tal devices—it’s the speed of the network. Nielsen’s Law, named after Jakob Nielsen, says that
network connection speeds for high-end users will increase by 50 percent per year. As networks
become faster, new companies, new products, and new platforms will emerge.
YouTube, for example, started in February 2005 when there wasn’t a lot of video shared over
the Internet. But average Internet speeds were increasing to the point where a typical Internet con-
nection could handle a stream of YouTube videos. By November 2006, the company was bought
by Google for $1.65B. If you’re counting, that’s less than 2 years to create a billion- dollar company.
Network speed matters. The question is why didn’t Google, Microsoft, IBM, or Apple think of video
sharing before the YouTube founders?
There are other forces changing digital devices beyond Nielsen’s Law, Metcalfe’s Law, and
Moore’s Law (See Figure 1-3). Kryder’s Law, named after Mark Kryder, the former chief tech-
nology officer of Seagate Corp., says that the storage density on magnetic disks is increasing at an
exponential rate. Digital storage is so important that it’s typically the first question you ask when you
buy a new computer, smartphone, or tablet. There’s also power consumption, image resolution, and
interconnectivity between devices, all of which are changing, too. And this isn’t a complete list.
This Is the Most Important Class in the School of Business

This takes us back to our original statement that Introduction to MIS is the most important class
you will take in the school of business. Why? Because this class will show you how technology is
fundamentally changing businesses. You’ll learn why executives are constantly trying to find ways
to use new technology to create a sustainable competitive advantage. This leads us to the first rea-
son Introduction to MIS is the most important course in the business school today:

Future business professionals need to be able to assess, evaluate, and apply
emerging information technology to business.

You need the knowledge of this course to attain that skill.

Law Meaning Implications
Moore’s Law The number of transistors per square Computers are getting exponentially faster.
inch on an integrated chip doubles The cost of data processing is approaching zero.
every 18 months.
Metcalfe’s Law The value of a network is equal to the More digital devices are connected together.
square of the number of users The value of digital and social networks is increasing
connected to it. exponentially.
Nielsen’s Law Network connection speeds for high- Network speed is increasing. Higher speeds enable
end users will increase by 50 percent per new products, platforms, and companies.
year.

Figure 1-3 Kryder’s Law The storage density on magnetic disks Storage capacity is increasing exponentially.
is increasing at an exponential rate.
The cost of storing data is approaching zero.
Fundamental Forces changing
Technology