Why is network anatomy so important to characterize? Because structure always affects function.

– Steven H. Strogatz

Networks that seek commercial success must develop and maintain the ability not only to change in the face of highly competitive environments, they must also be able to adapt in ways that influence that environment.

– Robert Rycroft

“Everyday inventors don’t let themselves be limited like the rest of us do. They open their minds to the possibilities.”

– Rini Paiva, US National Inventors Hall of Fame

Yet the secret of evolution is the continual emergence of complexity. Simplicity brings a spareness, a grit; it cuts the fat. Yet complexity makes organisms like us possible in the first place.

– W. Brian Arthur

Natural selection may explain the survival of the fittest, but it can not explain the arrival of the fittest.

– Hugo De Vries

HW’s and SW’s Profit Functions Each Period Depend Upon
  • The portion of users who have adopted the new system during previous periods, that is, the installed base of users for the new system;
  • The portion of users who adopt the new system during the current period, which will depend on the price at which HW chooses to set for new system hardware during the current period; and
  • The portion of resources SW chooses to dedicate to the production of new system content during the current period.

HW's Profit Surfaces

HW's Profit Surfaces 

HW’s profit surfaces indicate that
  • HW’s profits will be low or negative during early periods of adoption, before many users have adopted the new system.
  • HW will start to earn large profits only if and when there is a sufficient amount of content available for the new system.

SW's Profit Surfaces

SW's Profit Surfaces

SW’s profit surfaces indicate that
  • During earlier periods
  • SW’s profits will be higher when SW provides more content for the old system;
  • As users begin to switch over to the new system, SW’s profits will decrease until a certain threshold of users have adopted the new system.
  • During later periods, SW’s profits will be higher as more users and content switch over to the new system.