Metcalfe’s Law, let me count the ways…

I keep pondering the implications of a billion connected people and a trillion connected devices. These estimates, from my post on IBM and Cloud Computing, originated with IDC market research, predicting that by 2011, there will be one trillion Internet-connected devices, up from 500 million in 2006.

But if that is the size of the network, what is the value of this network?

Metcalfe's Law states that the value of a telecommunications network is proportional to the square of the number of connected users. Using Google, I determined that one billion squared is a quintillion, a one followed by 18 zeroes.

But are users just people? According to the Wikipedia, Metcalfe's Law was originally presented, circa 1980, not in term of users, but rather of "compatibly communicating devices." Is the value of the network going to be a trillion squared, which is a septillion, a one followed by 24 zeroes?

I suspect that if we toss out a quintillion here, a septillion there, eventually it will add up to real money.

For more discussion of Metcalf’s Law and its relevance, read Simeon Simeonov’s “Metcalfe’s Law: more misunderstood than wrong?”

Cloud Briefing in Technology Review

MIT’s Technology Review Magazine this month contains an excellent 11-page briefing on Cloud Computing. This briefing, with interactive diagrams, can be viewed by clicking here.

A few tidbits:

Key players in this field include: Werner Vogels, Amazon; Jim Blakley, Intel; Reuven Cohen, Enomaly; Dave Douglas, Sun; Kevin Gibbs, Google; Kristof Kloeckner, IBM; Ray Ozzie, Microsoft; and James Urquhart, Cisco.

Private companies to watch are 10Gen, 3Tera, Appistry, Elastra, Enomaly, XCalibre, ServePath, Heroku, RightScale, and Joyent.

Is Zipcar leading a second generation of iPhone Apps?

Fully one quarter of Zipcar members use iPhones, according to Zipcar’ s Luke Schneider, who unveiled a new iPhone app at Apple's Worldwide Developers Conference. Scott Kirsner reports “it got me salivating (I'm a Zipcar member): it offers GPS help finding cars that are available, and can even honk the car's horn to help you locate it in a parking lot. See the video demo here, wherein Schneider shows off their use of Apple’s 3.0 SDK mapkit and demonstrates the Honk icon to spontaneous applause.

From Kirsner’s Innovation Economy blog: “Zipcar CEO Scott Griffith told me today that he has already been testing the beta version on his iPhone, with a few of the company's cars here in Boston. ‘We're finishing the app now, and then we have to do a complete new software download to our whole car network, so that iPhones will have the ability to honk the horn and unlock the car for you,’ Griffith said. The app will be free. Griffith estimates that it'll be available in about four weeks. Future versions of the Zipcar app, he added, might give Zipcar members discounts on music, or deals on iPhone navigation apps or other travel-related apps.

Could this be the start of a new wave, the Second Generation of iPhone Apps? It took fifteen years to get to third generation computers (IBM/360). Can an iPhone generation be less than a year?

Skyhook included in Dell Netbooks

Skyhook Wireless Inc. , one of the companies we follow, has closed a deal with Dell Inc. to supply its hybrid Wi-Fi and geographical positioning system for integration into Dell’s Mini 10 netbook.

“I think what’s really neat about this is that this is the first time we have seen this new category of netbooks looked at as a purely mobile device. They look at it as more of an enriched Smartphone” says Skyhook founder and CEO Ted Morgan.

Initially, two Skyhook applications will be offered with the Dell Wireless 700 location solution: CoPilot and the Loki Dashboard. CoPilot is a navigation application that gives turn-by-turn driving directions as well as local search of key points of interest. The Loki Dashboard is a web portal that uses the netbook’s Skyhook-based location engine to customize widgets for news, weather, tweets, photos and events around you.

For more information, try Mass. High Tech. A description of Skyhook’s technology can be found here in my blog.

Intel Capital Still Investing Aggressively

So many articles have appeared recently describing how venture capitalists are NOT investing that we can forgive the entrepreneurs among us for thinking it rains every day here in NH.

In contrast, Intel seems to be a pretty optimistic company, and not just because Intel CEO Paul Otellini recently said he saw quarterly sales at the chip giant return to "normal" levels. While many venture capitalists have been hunkering down since last October, Intel's venture capital unit has been actively looking at deals.

Lucy McQuilken, Investment Manager at Intel Capital, confirms that she is aggressively looking for investments. "We're very active," she said. "It's an excellent time to invest. We invested through the last downturn in 2001 and I think we wished we invested more. Some great companies were built during that time."

To learn more, click here to view Bambi Francisco’s interview with Lucy on Vator TV News.