"Software companies are poised to take over large swathes of the economy."
Marc Andreessen's thought provoking WSJ opinion piece Software is Eating the World really has me thinking.
More and more major businesses and industries are being run on software and delivered as online services—from movies to agriculture to national defense. Many of the winners are Silicon Valley-style entrepreneurial technology companies that are invading and overturning established industry structures. Over the next 10 years, I expect many more industries to be disrupted by software, with new world-beating Silicon Valley companies doing the disruption in more cases than not.
Why is this happening now?
Six decades into the computer revolution, four decades since the invention of the microprocessor, and two decades into the rise of the modern Internet, all of the technology required to transform industries through software finally works and can be widely delivered at global scale.
Over two billion people now use the broadband Internet, up from perhaps 50 million a decade ago, when I was at Netscape, the company I co-founded. In the next 10 years, I expect at least five billion people worldwide to own smartphones, giving every individual with such a phone instant access to the full power of the Internet, every moment of every day.
The next decade will be truly transformative, and software will accelerate that transformation.
We can develop the change we seek in the world, through software.
See also: The Internet is my religion.
He's got some great points but he is pretty aggressive about classifying everything as "software." The most valuable tech company right now, Apple, is mostly a hardware company. Amazon uses software but obviously a lot of its expertise is in running efficient warehouses. I think part of his overuse of the term "software" instead of "computing" is a defense of HP's recent moves.
Computing is the dominant and most transformative technology of our era, so companies that take advantage of it are going to be more successful than those that do not. He could have probably written a similar article called "Steam Power is Eating the World" in the 19th century.
During each such era, it seems like the new paradigm will remain ever dominant. But it is very possible that as biotechnology matures, we will enter an era in which biotech becomes the most powerful technology, as it might solve our needs for health care, food, energy, etc.
I think it is also true that change and transformation is constantly accelerating as our accumulative technology builds on itself, and this is independent of any individual technology.
That said, it is a great time to be in software :)
Sarah Lacy says software is eating all the jobs too because if you can write software...
You can apply for Y-Combinator, you can raise money from hundreds of angels and VCs, you can bootstrap a simple Web or mobile app off of your credit cards, you can work at Google, Facebook, Zynga, Groupon, or one of the thousands of other startups desperate for coding talent. Every entrepreneur tells us hiring is the single hardest challenge they face right now.
I don't think hiring is the single hardest challenge right now.
Hiring is easy. Finding a worthy mission is hard. Especially in a time when the most successful Internet companies are focused on getting consumers to click on ads (Google and Facebook) or buy things we don't need (Groupon and Zynga).
Where is our mission from God? Where is the change we seek in the world?
Thought provoking yes, but I sure wish he and Fred Wilson would tone down all the plugging of their own investments. As soon as I see mentions of their own investments in their posts, I feel like I've been had, and I tune out. (I've been tuning out a lot lately.)
Apparently you give up subtlety when you become a venture capitalist.
Suddenly the only things that matter in the world are the things touched by companies you've invested in.
It's not their fault. Money has karma.
I can appreciate what MarcA is saying though. For instance, some of our 106ers are at Silver Spring Networks... a perfect example of transforming a whole industry (utilities) via software. Yes they have hardware, firmware, software, applications, wireless networking, and god knows what else... but fundamentally the backgrounds of the key technologists are in software and internet. That's super exciting to those of us who came late to the technology game and lived through years of being marginalized for our lack of EE and CSS. :)
Another great example from 106 is Euclid, which taps into smartphone data inside stores. Again, they have hardware, mobile, apps, data, etc. -- but the fundamental expertise is software expertise.
So have we reached the Golden Age where we who tell the machines what to do are the leaders of the world economy?
"Uber is software eating taxis."
Nice visual.
Source: http://news.cnet.com/8301-1023_3-57345138-93/marc-andreessen-predictions-for-2012-and-beyond/
I definitely don't think that the trend of software being involved in more and more parts of every system means that software developers take over the world. Much as I would like for that to be true :-)
The need for domain expertise never goes away. Or the mission from God, however you want to state that.
Once you have a problem to solve, moving as much of that problem solution as you can into software gives you all the wonderful malleability that comes along with software. And gives you more degrees of freedom in the process of trying to optimize for solving your problem
Someone needs to make software in order to make that happen. But there still needs to be someone awesome at solving the problem you're going after to get leverage out of that software.
Mike, I agree.
Software allows us to automate solutions to problems.
But it doesn't remove the need for domain experts to solve problems.
Instagram sold for 12,000 times what Kodak is worth: http://pandawhale.com/convo/1016/instagram-sold-for-12000-times-what-kodak-is-worth
See also Marc Andreessen's remarks to Peter Thiel's class at Stanford.
