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Exponential growth – most common unproven assumption in business cases

Loading...Big Data and the Internet of Things business cases make a number of unproven assumptions, but mostly they assume exponential growth.

Sometimes there are lies, damn lies and technology marketing

There’s no easier way to make a technology business case than to suggest that growth will be exponential. In other words, you suggest that the benefits of the technology will grow every year at a constant rate so that the benefits will rapidly and steadily increase.

I have seen business cases connected with Loading...Big Data and the Internet of Things that make a number of unproven assumptions, but mostly they assume exponential growth, with the only evidence being “Because of Moore’s Law, Stupid”. Moore’s Law is the single most overused and abused concept in Technology marketing. It refers only to the doubling of the number of transistors per square inch of integrated circuit over the last 40 years or so – a very specific technical observation about one component in a computer.

However, Marketeers, whether through ignorance or fraud, misuse the rule by making statements like “computer power doubles every two years”. This is just not true – computing power is more than a matter of transistors per square inch. For example: disk speed, clock speed and network speed don’t double every two years.

And once they’ve misused Moore’s Law a little, it’s a small step to misuse it a lot and to suggest that everything to do with a particular technology, for example the financial benefits, will double every two years “Because of Moore’s Law”.

Even if this were true (and it isn’t), there are no historical precedent for thinking that growth would continue to be exponential into the future.

For example, air speed records start out with the Wright brothers and a bicycle-powered plane capable of 7 mph. For the next 30 years we have a linear growth before WW2 and the invention of the jet engine. Things do briefly get exponential as we break the sound barrier, and people in the early 1960s did believe that growth would continue that way into the future. But in fact growth stopped dead with the Blackbird spy-plane in 1976 and today, every aircraft that has materially exceeded Mach 2 is in a museum.

Another thought – the youngest of the men alive who has walked on the moon will celebrate his 80th birthday this year. Manned Space Travel is another technology connected with speed that, ironically, lost momentum.

In history there have been many reasons why growth of a hot technology stopped being exponential at some point.

For example, there is currently no economic case for supersonic passenger flight and there is little investment in faster spy planes now that we have satellites and drones. Google and Microsoft would be even bigger if it weren’t for various pieces of anti-monopoly legislation. There is a wide-spread social opposition to nuclear power in many countries which means that the early growth has not been sustained. With mobile phones, if almost everyone already has one, it’s harder to sell more.

And sometimes leading edge technology is just difficult. Unforeseen technical difficulties arise which cause development to hit a wall. Maybe not permanently, but certainly enough to stop continous exponential growth.

All I’m trying to say here is that if someone tells you that a technology is “growing exponentially” – you need to ask yourself – “is it really?” and “for how much longer?”

Because in a finite world, nothing grows exponentially for ever – apart from maybe technology hype.

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