Pendragon

No One is Talking about “the Problem that Must Be Solved”


John von Neumann was a Hungarian mathematician that lived from 1903 to 1957. For anyone who has been trained in economics and finance von Neumann is known as the father of game theory. But, as it is true with many geniuses, he made contributions in many other academic fields of study. It is his contribution in the field of computer science that is of interest. It turns out that von Neumann is also the father of the basic computer architecture that all the computers run on today.

 

Von Neumann came from a wealthy family, and as a child prodigy made his way to Germany to study under the super star David Hilbert. From Germany he was hired at Princeton in 1937. While at Princeton he was offered a position at the Institute for Advanced Studies (“IAS”), an offer made to only the rarified few geniuses such as Albert Einstein. It was at this institution that he was introduced to the problem of how to build a general purpose computer.

 

The quest to change specific purpose computational machines into a general purpose binary based computer culminated in a summer school held at the Moore school of Electrical Engineering, at the University of Pennsylvania in 1946. Thought leaders in computing gathered from around the world and the architecture of the digital computer was agreed upon. That architecture was presented by none other than John von Neumann and the seed of the digital age was planted that summer.

 

The von Neumann architecture describes the general framework and structure that a computer, software, storage, memory, data and hardware should follow. This general framework is the foundation of our digital economy, but with all systems there are shortcomings. The throughput of these systems is limited by the rate at which data can be transferred to the computer’s processor. A bottleneck occurs between the memory and the computer’s processor. This bottleneck is aptly labeled the “von Neumann bottleneck”. With the convergence on alternative intelligence, machine learning, neural networks, 5G, and the new data economy, the bottleneck that was introduced and identified in 1946 has taken center stage. In the new digital economy what is fundamental to value creation, is the real time processing of unstructured data. Intelligence increases with the quality of the data collected and its real time processing. The cognitive decision and services that are created out of the real time processing of data will disrupt every industry in the global economy. The limitations on the amount of data that flows to the processor, the von Neumann bottleneck, is the fulcrum problem that innovators are now focused on solving.

No One is Talking about “the Problem that Must Be Solved”

The need to get data close to the computer processor and the process to create value with no latency is the quest that exists today. The use of data has evolved to the point where it is the disruptor. Artificial intelligence, the role of the cloud, data centers, the smart edge, and smart devices are fundamentally changing the role of data in our economy. Ten years ago storage and memory were all about downloading songs onto one’s iPod. Today, storage and data are needed to make sure that life critical cognitive decisions, made by machines, happen in a split second. To wit, that is why the storage in memory industry today is a hive of innovation and a field where investors should hunt for value investments.

 

Dr. James E. Thorne
Chief Capital Market Strategist & Senior Portfolio Manager

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