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June 25, 2005

The Net of the 'Net

Guilty of hunting most of my news-before-lunch online, I pushed through and out of a thicket of links into a cool breeze of clarity in IT consultant George Spafford's article on the net present value of a network (available through the JupiterWeb / Earthweb.com syndicate).

Spafford puts a stake in the ground: "we can safely assume that for any network, only 20% of the nodes will create 80% of the value." But on his way there, he points out (even more importantly in my view) that any node on a network can be counterproductive as well as productive, and if productive it can be in many ways.

That means the value produced through the network has to be developed, through decisions that determine when, where and why nodes behave the way they do. The variability of these decisions is the network's potential range of productivity.

Fully appreciating what this means, it's important to not think of the network in terms of something bounded by its physical components. Instead, the network is an environment to be managed, and the value drawn from the network is the "return on management".

That said, what is the virtue of a network, as opposed to other forms of environmental organization? For example, if a network is not the same as a "system", what is the particular distinction behind its design?

The important difference is what essential types of functionality the design pursues.

Systems are designed to be self-contained, drawing effectiveness from the fact that they are securely bounded, which allows for predictability of functional efficiency based on controlled processing of fixed resources.

Networks are designed to find resources, drawing effectiveness from the fact that they are not physically bounded yet provide control of how resources are found.

Seing systems as being resources allows us to envision making a network that finds and connects systems, and naturally explains a division of labor between network management and systems management.

As we continue to explore different types of networks including technology, society and processes, it remains always basic that the productivity and value we imagine is invariably due to the integration achieved within the network, through management.

Different environments have differing ecologies, from which productivity and value are derived. For example, we know that a tropical island environment offers different opportunities and methods to generate value than does an inland desert.

These ecologies are not just circumstantial constraints but instead are the cultural level on which management must also be conducted if any pretense of sustainable value-generation is to make sense.

And so it is that in any network, a culture becomes the "boundary" or domain of the value that may be obtained. Meanwhile, a network can host multiple cultures. Any determination of the network's value must acknowledge that the evaluation presumes certain preferences about which cultures should be hosted and how they should co-exist...

Posted by Malcolm Ryder at June 25, 2005 9:55 AM

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