Moore's Law describes the falling cost of digital technology. When my daughter was born in 1980, the price of the memory chip for a home PC was $1,000.00 (not the whole PC, mind you, just the memory). When my daughter was one year old, the same amount of memory cost only $500.00. When she was three years old, the price was $250.00. When she started the first grade, the same amount of memory cost only $62.50. When she graduated from high school in 1998, the price of that same amount of memory had fallen to less that $0.25. When she began her junior year in college, the cost for the same amount of memory as in that original PC was just pennies. I assure you that nothing else we have purchased over her lifetime has decreased in cost anything like that!
We, of course, upgraded the amount of memory we used over the years. Each time we upgraded, we spent about the same amount of money but got more and more computing power. So, what really happened was that our computing power increased by four times every three years for the same cost.
Gordon Moore, one of the co-founders of Intel Corporation, made mathematical observations in the 1960's of the engineering practices which allowed miniaturization in semiconductor technology. This miniaturization applies to processors and other computer components as well as memory chips. What he observed mathematically is that computers can be made four times more powerful every three years for the same cost. Some argue that this same formula has held true for a full century, if you include the mechanical computers of the early 1900's and the old-fashioned transistors that followed.
If you knew that you could get four times more raw materials every three years with no increase in cost in a given business, would you want to get into that business? The overwhelming answer everywhere is, of course, a resounding "yes!"
All businesses, even traditional brick and mortar businesses, must market their goods and services. Because businesses look for the lowest cost to perform their processes, more and more marketing information and marketing processes, even for brick-and-mortar businesses, has become digital.
Moore's Law ensures that Internet businesses, especially Internet marketing, will continue to grow and flourish at an astounding rate. Will Moore's Law continue to hold true in the future? Can engineers keep making computer chips cheaper? Intel's engineers assure us that Moore's Law will continue to operate for several more device generations, if not indefinitely.
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