Network effects explains the value of a good or service as a function of the number of users of the good or service. Positive network effect is the phenomenon when a good or service becomes more valuable when more people use it. Internet is a good example of positive network effects. Initially, there were only a few users and correspondingly there were limited offerings on the internet. However, as the number of users grew, so did the number of websites and the content available online, creating a positive effect for both the users and providers.
The basic concept of Internet of Things is to move from siloed, vertical processes to inter-connected smart processes and to move from taking intuitive actions to insightful data-driven effective actions. The effect of these actions grows, as more and more devices are connected to the network, providing increasing amount of data.
For our proposed IoT solution, although the initial penetration would require higher efforts due to lack of awareness amongst farmers about the potential of smart agriculture, there would be a positive network effect as the technology is adapted by more farmers. The idea is that as more and more farmers incorporate this technology, they would share more data with the software controlling their devices, and therefore more informed decisions can be made. Adaptation would also increase as farmers would realize the benefits reaped by those who incorporated this technology in their farms. Some visible benefits are reduced labor, decreased utilities requirements, improved crop yields, etc. Further, if farmers agree to share their data with others in the community using the IoT platform, they can help each other by sharing knowledge about any prominent or probable issues that exist or may arise.
This ability of IoT to integrate findings from disparate systems to increase value exponentially would create a positive network effect for IoT in agriculture.
Source: http://dmresourcecenter.com/unit-1/internet-of-things/
