Moore's Law Explained

Moore’s Law and Growth of Technology

Speaking of Facebook, the ability for the platform to scale to handle unbelievably massive amounts of data owes a debt to Moore’s Law. With 800 million people around the world uploading text, images, videos for free, the amount of server space required becomes mind-boggling.

But how does the technology infrastructure keep pace with a Facebook’s growth? Or to expand out, why does the digital space change so fast?

In 1965, the co-founder of Intel, Gordon Moore wrote a paper that stated the number of components in integrated circuits had doubled every year from the invention of the integrated circuit. Later Moore revised his law to say that the number of transistors on a chip would double every two years, which has held pretty much true. (Although some argue it has become a self-fulfilling prophecy for the semiconductor industry.) [Source]

This somewhat obscure law has governed much of technology’s growth in the 20th and 21st centuries and ruled Silicon Valley. It means computers get smaller, faster, and yet hold more data.

Consumers get two remarkable benefits: their technology gets faster and it costs less money.

This short video from Scientific American does a nice job:

What Moore’s Law Means

Moore’s Law in effect means that power doubles and costs are cut in half every two years. It’s why we can fit thousands of songs in our pocket. Or have real-time navigation in our cars through GPS. Or stream videos on our televisions and laptops.

Most importantly, it means that technology innovation will not slow down but instead continue to speed up.

Once you start to grasp the implications of Moore’s Law you quickly see that the coming years will continue to bring unprecedented change. Technology gets better and cheaper over time – an unnatural benefit that rarely occurs in traditional economic models.

Moore’s Law builds the foundations for incredible innovation and disruption. When technology can grow at such a rate, the applications of such technology are no longer limited by infrastructure but rather by creativity. Google gives away much of its offerings for free in part by being able to exploit Moore’s Law. The company can continually store more data for cheaper and deliver it faster to its users. As a user, we have free email, powerful search engine, Google Earth, and real-time maps on our phone. All this has taken just a few years not decades to develop.

Fallout from Moore’s Law

Such incredible change and innovation does not come without casualties though.

Witness the media industry completely caught off guard with the rapid shift to online consumption. Craig’s List allows anyone to sell products or services online for free, completely replacing classified ads and crippling the newspaper industry almost overnight.

And where consumers go, so goes advertising. We’ll return to this in the Research part of the text.