A Network on Top of Networks

The network mail software that Tomlinson developed and Hotmail share a fundamental trait: they empower communications without building dedicated infrastructure. Instead, they use pre-existing infrastructure and services, albeit in a different and creative way: they build new networks on top of previously existing networks.

The telephone network has traditionally been a centralized network managed by the same organizations that built the physical infrastructure supporting the service. Deregulation created a decentralized network of networks, as interconnection ensured that everyone could talk to everyone. The network of telephone networks is coordinated by regulators who define the standards and the conditions for interconnection. A standardized numbering system managed by an international institution (ITU) identifies all users in the world; standards for signaling and network interconnection are defined by regulators. Interconnection prices are regulated. Governance of this network of networks guarantees full network effects, but it is expensive and inflexible.

The internet is a fully distributed network of networks. Each independent network (a university, a public institution, a corporation, an ISP) runs independently and takes care of its own infrastructure. The Internet Protocol makes sure that different networks can communicate with one another. Network interconnection is decided on a commercial basis without governments intervening in the form of regulation. Packets are transmitted through the fastest route, across different networks. There is no centralized coordination. The network of networks is flexible and reliable.

The internet is more powerful than the old telephone networks, as it connects far more points. It connects not only humans who are willing to communicate with each other, but also connects computers with humans, and computers with computers - the number of computers is enormous (desktops, laptops, smartphones, sensors of all kinds in the Internet of Things, etc.). The internet, the network of all networks, includes the telephone network and many other networks, creating the ultimate network effects.

Applications like email exist on top of the internet. They do not create new infrastructure, but rather rely on the existing infrastructure of the internet, and on the protocols for the interconnection of the different networks. Email creates a new network on top of the internet. It can grow as large as the internet. Because it is built on the same principles of the internet, anyone using the protocol can connect with anyone else in the network. The internet is all about network effects, and so are the leading applications built on top of it.

The rapid development of Hotmail can only be explained by the fact it was built over pre-existing networks: the telecommunications infrastructure and the Internet Protocols interconnecting telecommunications networks overthe internet.

 
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