Perhaps surprisingly, the axis of the Internet is not the result of any single technological breakthrough; it is, in fact, the product of simple mathematics that results when everyone is connected to everyone else.

Connectivity-massive, global connectivity-is at the heart of the Net Effect. The confluence of widespread availability of diverse computing systems, easy access to data communications over existing telephone networks and a killer app-the World Wide Web-have helped Internet connectivity transition from being exotic to de rigueur in just a few years. The Net Effect arises from this universal connectivity, which continues to grow at a stunning rate. Universal connectivity, in its turn, brings into play the well-known mathematics usually described as Metcalfe's Law where users are added to a communications network one by one, they bring new opportunity and value to all the existing members of the network. Consider, for example, a telephone network. With one telephone, you can call no one. With two telephones, two calls can be made-one in each direction. With three telephones, six calls can be made, with the extra phone adding one person but four extra opportunities. A fourth telephone means an additional six new call opportunities for a total of 12, and so on.

Metcalfe asserted that the opportunity grows in accordance with the square of the number of participants. We've seen this law bring value to many fields of communications and it's clearly at the heart of the Internet as well. Of course, not every newcomer necessarily adds the same quality of opportunity. That is, not all the calls that can be made are as useful as all the others are. Adding another Web client usually adds less value to the World Wide Web than adding another server, but the square-law-style growth is clearly at work here, too.Connectivity is one thing, but gaining access to the opportunity is the key to successfully navigating the Net Effect. In other words, how does one secure value from this opportunity? The ideas Bob Metcalfe expounded have a flip side as well. For every new connection, there is a potential cost. Back in the days of bulletin boards and proprietary network protocols, every new network connection involved skill and investment, be it deciding whether to use seven or eight bits with or without parity, or deciding whether to use SNA, BNA or CO3 and with what parameters. In short, each new connection came with a cost.

The Internet phenomenon could have happened sooner, but it took the convergence of several factors to make the cost growth associated with the opportunity growth shrink to the point where value could be derived. It took more than just massive connectivity and Metcalfe's Law to explain the way the Net Effect was unlocked. It also took the use of shared, open standards in an open community.

When each connection requires individual intervention to make it succeed, the cost of the connection grows at a similar rate to the opportunity, stifling the possible value to be gained. When all the participants share the same open standards, the cost of a new connection is minimal as it involves one link to the community rather than one link to every participant. In this way, the cost increase remains linear in orientation. This asserts that massive connectivity can only lead to massive value when the participants all share common, open, community-based standards.

If the Internet were just a straightforward network, the results would be remarkable enough. But the fascinating element of the Net Effect is that the Internet is not just one, square-law-growing network; it's layer upon layer of networks, all full of potential. Each time a new application is added to the network, a whole new pool of connected opportunity is made available. This opportunity can then be turned into value by the wise use of open technology. The telephone network led to the public Internet. The Internet led to the World Wide Web. The Web led to business-to-consumer e-commerce, which is leading to business-to-business e-commerce. At each step, as a new application is discovered, the startup time for the network of connected opportunity gets shorter and shorter. Instead of waiting for new joiners, the network has millions of people and systems already interconnected. The newest layers concern wireless information services and computer-to-computer (Web) services, but there will be more.

Clearly, most of the key commercial players have recognized the way the Net Effect works, leading to gradual changes in the rules of engagement. We can no longer easily discern the blatant proprietary behavior observed in the '80s and '90s; instead, everyone wants to be seen as an '"open'" player. Under the surface, however, most of the old behaviors continue to be practiced. For example, new standards are often a minefield of reserved intellectual property rights, with the legal ideas of an earlier era still being applied to the new world. Also, the strategy to lock in by adding vendor-specific features to the work of others-"embrace and extend," as it's called-remains in active use. Today, it's the standards that are being extended and polluted, not just other companies' technology. Consequently, opening up new layers of opportunity is not as straightforward as it could be.

Have we seen the Net Effect run its course? We are heading inexorably toward a world of spontaneously federating Internet services. Open and standard data formats, always-on wireless and wired connectivity and universal secure network access will lead to a world in which software, data, devices and services "swarm" around individuals and businesses, and exchange permitted information spontaneously to prepare proposed solutions for direct requests and detected needs.

The 'swarm' around me will spot my needs for information to support work and leisure activities and use my contextual information to interact with other swarms. At the center of this vision is the idea of using the Web to build "smart" services. In the future, services will '"spontaneously federate,'" with "spontaneously" meaning they will find each other dynamically across the network, and "federate"meaning they will build through their interaction exactly the custom smart service you need, exactly when you need it.

In a world of spontaneously federating services, there is no point in having a proprietary service. Developers will want to develop to open standards with component-based technology that easily integrates and interoperates with external systems. Anything else is a waste of the developer's time, the company's money and the user's experience. Everyone within the network community-developers, service providers and enterprises alike-all need to promote the true openness that will allow all to benefit from the rising tide of opportunity.

With the recent announcement of the Open Net Environment (ONE) by Sun, an open architecture for developing Web services, the industry's conversation about standards has heated up. The architecture establishes a solid foundation for creating Web services empowered by Sun's ONE technology, which is built around open standards such as Java, XML, UDDI and Soap. Such architectures establish a clear path for achieving smart Web services tomorrow that will know both who and where you are and what you need and will deliver that information to a variety of devices.