A Bright Future for Software
Dec 03, 2008 In Web Culture By Joshua AllenIt seems like everywhere you turn these days, there is more bad news about the global economy. Bankruptcies, layoffs, and bailouts continue to mount. We are hearing the words "recession" and "depression" more frequently than ever before in our lifetimes. The truth is, the world is in the midst of a severe economic crisis, and the end isn't yet in sight. But if you do software, web development, or media, you have good reason to be hopeful about the future. This is the time to hunker down and continue growing your skills and experience, because what you do will be more important than ever.
Unlike some of the other industries hard-hit by the crisis, we've already been through this before. The information technology sector alone lost 700,000 jobs when the Internet bubble burst in 2000. These were permanent job losses, never to be recovered, and even the most pessimistic estimates predict only a fraction of the losses this time around. Our industry is paranoid by nature, and we've watched a number of failed business models go by the wayside since 2000, while new models have emerged. There will still be some painful lessons to learn before the worst is over, but our industry as a whole is much stronger than we were 8 years ago.
The real reason for hope, however, is the nature of software itself. Software is one of the most scalable forms of human value creation ever achieved. When you write a piece of software, your skill and effort can benefit thousands, millions, or hundreds of millions of people with almost no incremental cost to you. Web developers understand this intuitively. Facebook expends almost zero incremental effort to propagate new features to 100 million users. The same holds true of traditional skrinkwrap companies. Adobe Software, who spend heavily on research and development, still enjoy 80% profit margins when expenses are accounted for. Microsoft, Google, and Apple enjoy similarly high margins, and it's not because we are geniuses -- it is because software is such a superbly scalable way to provide value.
This wasn't always a matter of common agreement. There was a serious debate in the 1990s about the value of software. Some companies felt that software was simply free "bait" that could be used to sell hardware. Those companies are now defunct. And most importantly, companies like Google and Apple (and of course, Microsoft) who focused on software, have done well. This isn't to say that hardware is defunct -- back in 2004, Steve Jobs famously explained that the iPod is simply "software in a box". The complete experience requires you to purchase the proprietary hardware and pairs you with the iTunes software service, but these are essentially mechanisms to prevent piracy. The real competitive advantage is in the software. The mobile handset companies who have done very well, all realize that their hardware is a mechanism used to sell their software experiences, and not vice-versa. Likewise, Google's crown jewel, the pagerank software, is kept secret from most Google employees and is hidden behind a service, yet can benefit millions of users by being made available over the web.
You already know that creating software is hard. Skilled user experience professionals, developers, and testers don't grow on trees. Traditional software (whether in a file, in a box, or in a cloud) will be more important than ever, and the massive changes taking place in the world economy will present some new opportunities for skilled people to contribute to the common good. Software will be needed to help fill the holes left by the decline of mainstream news organizations. Software will be needed as spending on energy independence increases drastically. Software to make healthcare more efficient, software to help citizens connect more effectively with government and social programs, software to educate, inform, and inspire. Yes, software will be more important than ever. There may be lean times ahead for all of us, but there is no better time to start getting better at what you do.
So, what are the trends in software that get you excited about the future? Where do you think the biggest challenges and opportunities lie? We'd love to hear from you. And don't forget to subscribe to the RSS feed or follow mixonline on Twitter to get future updates.
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Thoughtful musings.
The biggest trend should be toward BETTER and BETTER software. Having been in the enterprise software space for 20 years I see no up-coming ‘killer apps’ that will create waves for us to ride. But the steady driving under-current is for better software that is more intuitive, stable, performant and user configurable.
As you say, creating good software is hard. Creating GREAT software is very hard and rare. Go on, ask yourself, how many of the apps that you use everyday do you truly LOVE? And how thrilling is it when, once in a blue moon, you actually find a new one? Every software product has the potential to induce a thrill so let’s all focus on that goal for a while.
Thanks, Martin, great points! I remember when the large pre-built ERP companies swept through the industry and replaced all the home-brew MRP systems — I really think cloud computing will have a similar impact in a similar timeframe. And it’s sometimes fun to play around on the old Commodore or Amiga emulator sites to remember the thrill we experienced from those old programs when they came out. Software has only gotten better since those days.
If Adobe is having 80% profit, why they laid off 10% people? That’s not a bright future to me!
Karl: These are our industry colleagues, and it’s never pleasant to see people lose jobs. Not the first company to do layoffs, and won’t be the last before this is all over. But note that Adobe had record earnings per share this time, so they are still quite profitable, supporting the thesis that software by nature has some unique strengths.
Karl: Unlike government, private companies (at least most of the well run) are trying to keep lean and “mean”, especially at difficult economic times. Adobe management recognizes that such times, and competition from … Microsoft … is going to present some challenges. Shaving off 10% does affect real people, but ultimately will benefit all parties in the long run.
As far as the main topic: Is software development the way of the future. Well, After a major water leak in my house, I discovered one little secret career one should look into… plumbing. $120 an hour, with no stress, lots of outside work with very desperate but grateful people (after you fix the problem of course), does not sound that bad. What do you think? :)
The current economic condition would force clients to demand more for the same dollar value. The software companies would have to be more done from the available resources. This would drive innovation at a much rapid pace. We would have to create more efficient ways of developing better software. Specifically, I expect to see better productivity software (search applications, planning applications etc.) down the road.
@Boggy, @Inder: Good comments; thanks!
Hi Joshua
I love you optimism, but for a man in a profession defined by logic, I cannot see how you reconcile a bright future with software patents. ISVs have no real chance to compete (I refuse to use the word ‘innovate’) with the constant threat of being sued out of existence by the current monopolies or patent trolls.
Software does have a bright future as long as it is free of litigation. Microsoft would not exist if there had been the current patent regime in place in the ‘80s (ask Bill). Some might argue that would be a good thing, what with their continuous efforts to subvert standards and balkanize the internet, but equally, software patents now stifle true innovation (damn, I used that word). We are currently at least five years behind the curve courtesy of a combination of monopoly practices and patent threats.
The true potential of software and the internet can only come to the fore if we work together for the benefit of all, not just for the shareholders (and relatively few employees) of the globalcorps.
Just say no to patent encumbered standards on the internet (that’ll be silverlight for a start!)
The future is bright, eh. Name one science fiction movie or TV series in where new software is still being written and where there are visible IT Pros or in which software companies aren’t depicted as evil overlords.
It seems to me that our own mass culture doesn’t believe that software has a bright future.
Oh and “Star Trek” doesn’t count because the software is all “perfect” and any character can rebuild the computer core if the plot calls for it.
@GreyCells: IMO, there is a reason that all of the greatest advances in software have come from countries that have strong intellectual property tradition, and then have been copied elsewhere.
But I agree that there are serious problems with our current patent system. Andy Grove last week argued for serious patent reform, and I agree with a lot of what he said.
OTOH, I think the talk about “patent encumbered standards on the Internet” is often lacking in clarity and indulges in wishful thinking. For example, nobody expects Google to release their PageRank software patents to a standards body, even though it defines an Internet platform with network effects upon which many thousands of people make a living. Likewise, nobody expects Apple to give away their patents to a standards body simply because thousands of mobile developers would rather not be locked in to Apple’s hardware or choice of carriers. I actually agree with you that MSFT should continue submitting more patents to W3C and helping push the web platform forward, but I think it’s extremely naive to think that this alone will liberate developers from proprietary lock-in that is enabled by software patents (Google and Apple being just two very profitable examples). And I personally think that these software patents are a good thing, as they have enabled these companies to bring some good things to the world.
@MikeGregoryA: Check out this recent article from popular science fiction author Bruce Sterling:
http://interactions.acm.org/content/?p=1244
He argues that science fiction isn’t about predicting the future, but instead is about creating immersive fantasies. SciFi has a very poor track record at prediction, since that’s not its goal. The reason that it’s appealing to people is specifically because it allows an escape from the present without being entirely implausible. It’s easier to believe a fantasy when it’s anchored to some “science” and “progress”.
the best object created by god is humanbeing ,for they can develop themselves with their brain.i think the trend of software inthe future will like that.software will develop itself without the intervention of human.if we need some kind of software ,just give a order to a computer and it will give us what we need in afew minutes.(i’m a chinese.hope you can understand me.)