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Organic growth and the internet?


Hands up those of you who say the internet is getting slower as millions of people pour onto it each year. Wrong! In fact latest research indicates that the internet is in fact speeding up. Nua, an Irish company that publish a monthly update on Internet research, say that ping statistics (ping is a command used to measure the average time it takes for data to travel from one computer to another and back again) suggests that data is travelling over the wires about 15% faster each year. This is despite the fact that traffic has trebled annually for the past couple of years. How can this be possible? Service providers and other companies providing the actual backbone of the internet are building capacity faster than it can be used.

This points to an incredible characteristic of the internet. The ability to grow organically or in simpler terms the ability to grow in a way similar to how things grow in nature. Let me explain.

As no single company or government owns the entire internet, there is no single source of responsibility for its infrastructure. As much as the big players in the industry would love to say they dominate the internet, it may be worthwhile for them to note that ownership involves more than simply collecting the profits.

At the start of internet commercialisation a few years ago - many companies climbed on the bandwagon and became internet service providers offering connections to the internet. What they discovered was being a service provider is a very capital intensive business. While it is easy to have 50 people dialling into one server connected to the internet, problems escalate rather quickly when you have to allow 20 000 people access across 10 cities. This is the reason why many of the small ISP’s have dropped out of the market and service providing has been left with large companies who have deep pockets to support the growth over a number of years.

This is nothing new you say, pundits have been predicting the demise of the small internet players ever since their were small internet players. There is however a way for these companies to survive and that is very simply to limit their growth. By limiting their growth the company can manage their resources better, offer a better service and build customer loyalty for which customers are prepared to pay. On the flip side, growing exponentially means offering cut throat prices which lead to higher demand and more capital expenditure. This in turn cuts into sorely needed profits and eventually can cause the demise of the business. By throwing out the old paradigm thinking of - exponential growth is good - companies can carve out a niche and operate very successfully (and profitably) within their target market. Many smaller companies have now realised this and are changing their businesses accordingly.

So what about the organic growth of the internet? I believe that the internet, without any central control or the checks and balances associated with a 20th century management thinking, is going to demonstrate how business will work in 21st century. It’s success thus far is attributable to the manner in which it has been able to grow organically. Integral to this process is interdependence between the various companies and organisations playing a role in the development of the internet.

The internet could be likened to a living organism in that while it is always at risk of spinning out of control (cancer), it survives by adapting to the new environment where it finds itself. At the moment we are at the stage where the internet is still growing in a quantitative way. It is getting bigger every day without much concern for what it contains. I believe that in the future this quantitative growth will give way to qualitative growth where the concern will not be how big the internet is, but rather what it consists of. This can in a way be likened to the development of the human being. Our first 18 to 20 years are spent growing bigger and the rest of our life is spent growing better. We don’t generally get much bigger after 20 but hopefully we do get a bit smarter.

The way the internet works is probably foreign to many practitioners of modern management thinking. The internet is part of new paradigm thinking and cannot be controlled in the same way as a normal "organisation" where everything needs to be measured and controlled. The fact that nobody really knows how many people are on the internet is an excellent illustration of this point.

The success of the internet will depend on us being able to step back and deal with issues as they arise rather than planning for every eventuality. Much like nature needs to deal with problems as they occur we will have to have faith that we can overcome the hurdles while the internet grows. I feel that this is more important than researching all the possible things that can go wrong. Exciting times lie ahead with great learning opportunities for the open minded.