Moore’s Law is Coming to an End: So What?

August 30, 2013

If you’re reading this, you’ve probably already heard of Moore’s law, the observation that every two years, the number of transistors we’re able to fit on a given silicon chip doubles. This allows manufacturers to make them some combination of smaller, faster, and cheaper, and makes computation-heavy problems like big data and artificial intelligence relentlessly easier as time goes on. You’ve probably also heard the increasingly common argument that our inability to cool down silicon chips fast enough may spell the end of Moore’s law sooner rather than later. What you may not have heard is the argument that Moore’s law likely is coming to an end, but it also doesn’t matter. It’s not that I don’t think Moore’s law has been the driving force behind the rise of the computer — it absolutely has. But I also happen to think that the less heralded Nielsen’s law, which is by all accounts alive and well, has recently become far more important to the future of computing.

Moore’s Law is Dead, Long Live Nielsen’s Law

Nielsen’s Law is Moore’s law applied to Network bandwidth. More specifically, it states that high-end internet connections grow at 50% per year, or slightly slower than Moore’s law. So why is bandwidth more important than computing capacity? Before the internet came along, the only way to build a more powerful computer was to fit more transistors into a smaller space. To handle large amounts of data, business machines often had to be the size of a room, which is obviously prohibitively large for personal computing. Moore’s law rapidly made them smaller, cheaper, and more powerful. But in the very recent past, we reached a critical tipping point where network connections were largely good enough to bring cloud computing to the masses. Now, you can still make a computer work faster by stuffing it with more chips, but you can also make it faster by hooking it up to a bigger, faster, more optimally configured computer on a server farm in Oregon. In other words, Nielsen’s law has brought scalability to computing. Moore’s law has made computers smaller and more powerful, the equivalent of giving your house a more efficient gas generator. By the same analogy, Nielsen’s law has hooked you up to the power grid. I think it’s pretty clear which technology has been more impactful for the energy industry, and I think the same will be true for computing. More specifically, Nielsen’s law will likely manifest itself in a few different ways:

1) The Continued Rise of Mobile

Already, much of the desktop computing I do on a daily basis takes place miles away, so the biggest change won’t be to my laptop computing habits. It’ll be to my phone. While Nielsen’s law doesn’t specifically say anything about cellular data, that technology will likely improve at a similar rate as PC bandwidth and their common long-haul infrastructure gets cheaper and faster. What all of this means is that phones will likely rely less on computing power, have fewer apps, and essentially become an internet connection with a battery and screen. Taking this to an extreme, the combination of super-fast cellular data and cloud computing could make wifi a thing of the past entirely, making your phone the only device you need.

2) Internet of Things

As internet connections get cheaper and more powerful, smaller modems could be built into virtually anything, creating a more powerful version of the Internet of Things that is already developing around radi0-frequency identification (RFID). In 10 years I’d be surprised if I couldn’t locate my keys via their very own miniature modem.

3) Bigger Markets

In today’s world, a computer is only as good as its internet connection. Moore’s law may soon allow every child on the planet to afford access to a computer, but more importantly Nielsen’s law will connect them to the global ecosystem, creating (mostly) positive network externalities for everyone involved. That means a more connected, better educated global population, but it also means a bigger addressable market for internet companies. *** So don’t lament the possible demise of Moore’s law, celebrate the continued strength of Nielsen’s. After all, would you prefer a better gas generator or access to a power plant?

Behavioral Data Analyst

Nick is a Behavioral Data Analyst at <a href="">Betterment</a>. Previously he analyzed OpenView portfolio companies and their target markets to help them focus on opportunities for profitable growth.