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Where is the Software Industry heading anyway?

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Having recently attended a huge software developer conference it provided enough inputs for me to lean back and think where is the software industry heading anyway.  This post is to share some of these thoughts. The key message for me was “Consumption is King”. “Cloud”, “Mobile” and “Social” are redefining consumption and software industry is reinventing itself to adapt to these new realities. There are two key aspects to consider in this reinvention. First, how is software production lifecycle changing  and the second, what software is being produced.

Currently 90 day product release cycles and much lesser implementation times are demanded by the enterprise software world as is the norm in the consumer software space. This is where the classical “on premise” packaged software world fails and the “on demand” software as a service model excels. For the producers of packaged software this would mean a fundamental change in their business model from production processes, delivery models, sales models to support models. While the “cloud software” vendors have been able to build infrastructure from ground up to support such a business model the traditional vendors are still adapting. How does the modern software business model look like? It begins with the data layer with a next generation database. With the In-memory databases promising the best potential here. Having datacenter competencies to support high volume/low cost multitenant applications is essential. Most vendors are racing to establish their “Platform as a Service(PaaS)” offering to own this space (be it Salesforce with Force platform, Microsoft with Azure, Amazon web services, Google, VMWare, Facebook,…). This is still a market up for grabs. Its most likely that the traditional software stack (Database, Application Servers, Messaging Servers,..) will manifest itself in some specialized forms of “PaaS” offering with focus on Mobile, Collaboration(read social), Analytical, Transactional apps or a combination of a few. In this context its all the more important to get end users to using the platform, a developer ecosystem to build for it and for the vendor to efficiently integrate with other platforms.  The software production process to support global supply chains at cloud speed will be a real challenge. While most vendors are adopting variants of open source development processes (including contribution to open source products) , challenges on how they can be integrated and supported still remain. This production model which permits lower costs and greater adoption will most likely survive in particular for software at infrastructure layer. “Appstore” model to enable easy discovery and consumption of software is the new software delivery and sales model.  Its difficult to predict how this can look like in the future but the need for “instant” gratification will remain.How can the future support models looks like? While the “Maintenance Service tax” driven support model will surely change how the vendors can build a model to leverage “community” to drive support cost down and offer the benefit to end users will be important.

What new applications are coming from the software industry anyway? I like a recent Mckinsey article that “software layer” can enrich all customer touch points. Software is not only enriching but also enabling entirely new kind of experiences. Some examples for this are 3D printing, khan academy style teaching, Google glasses project to name a few. The software layer is enabling mass production of personalized goods/services and in the process disrupting traditional industries in different domains. With social networks acting as “filters” for the ever increasing data flood, information consumption and production will continue to explode. Its building rich applications on this software layer that will create the predicted new millions of jobs in IT. The recent software stars like “Instagram” and “Pinterest” show how fast things can be a hit in the “new software industry”.

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Written by srinivasreddy

April 15, 2012 at 8:24 am

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