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We Are All Software Companies Now

HP recently admitted they might not be making calculators much longer.  Their geeky financial and scientific calculators are now iPhone apps.  

I got to thinking about all the products or even industries that the iPhone app store will disrupt towards pure software businesses.  Here are a few I came up with:  calculators, remote controls, video cameras, point and shoot cameras, organizers, GPS devices, mobile gaming, and I am sure many many more.

Truth is almost any industry you can imagine is being driven increasingly by software.  Cars, media, computers, home appliances, switches and routers - you name it, it has a huge and growing software component.  We at Rackspace are not immune.  We are investing heavily in our software development capabilities as our offers grow from core dedicated computing services to include software powered cloud computing services.  Making software is at the center of our future.  I bet you it is at the core of your company's future too.

Here is a story about FreshDirect, an online grocer, writing "thousands of lines of code" to optimize how they pack boxes.  Below is a photo of the upcoming Tesla dashboard - one big screen powered by software.  The world is changing.

What does this mean for most businesses?  A few things, I think:

1.  IT and software/product engineering are not the same thing.  Both are really important, but one supports the business, the other builds the business.  Do not treat them as the same.  Especially as businesses transition to needing more software development in their core offer, they tend to rely on their traditional IT organization to deliver.  You need to create a focused group on building customer value.

2.  You cannot outsource something core.  Used to depending on an outsourcer or offshoring shop?  Those can be tools, but if software hits your core (and the argument is it is hitting your core faster than you think), you better get good at it.  Invest accordingly.

3.  If you don't keep your best developers happy (and challenged), be careful.  They will have opportunities.  In fact, have them email me!

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Comments (12)

Aug 03, 2009
Alan Weinkrantz said...
Great post. Last night, I was at the Apple store in NorthStar Mall (San Antonio) for One to One training. I started talking to my trainer about OEM / ODMs in Asia who make Apple's products and he looked at me and said - "yes, Apple is pretty much a software company."
Aug 03, 2009
DarthVegan said...
Interesting.
Aug 03, 2009
John Furrier said...
Bill and Dave (founders of HP) told engineers that they wanted a calculator that could fit in the shirt pocket. Hey there's an app for that. Bill and Dave would be proud of Steve.
Aug 03, 2009
Lew Moorman said...
Apple saw this years ago...and they are reaping the benefits.
Aug 05, 2009
Robert Boyd said...
Awesome post. You just earned another subscriber. I think American society is finally getting around to accepting the fact that building software is a pretty cool thing, and the iPhone has quite a lot to do with that. It sort of was cool, back in the mid 90s, but I think that might have had more to do with the idea that riches were sure to follow code.
Aug 05, 2009
James Watters said...
And if you don't bring software value to your industry, somebody else will. Ex: Open Table IPO
Aug 05, 2009
Lew Moorman said...
Great point James...You are exactly right. In almost any industry software can make a huge difference, and someone will figure that out to their advantage. In some cases it will radically alter an industry (amazon to books, open table potentially for restaurants, etc.)
Aug 12, 2009
John Abrams said...
As much as the iPhone is a great platform for different applications, when you want tip-top performance, you probably need a dedicated device. My HP 12c boots instantly and never gets locked up or needs a battery pull.
Aug 12, 2009
Lew Moorman said...
John, I don't disagree. I still use my 12c often. That said, it is early days. Don't think it won't get better and better. And, as you use the mobile 12c on the road, you will surely use it less and less at your desk
Sep 23, 2009
Uli Kusterer said...
I don't quite agree with your example of cameras. Yes, a certain base level of camera is built into the iPhone, but it's so restricted in quality that, at least for the near future, you'll still need dedicated cameras.

And even after that, anyone who buys an SLR today would still buy a digicam and not use the iPhone. The hardware has to great an effect on the end result for cameras.

That degree of commoditization of image processing chips will still take a while.

However, *everything* is moving towards being a computer, so in that regard, Cameras and the iPhone will probably come nearer each other in the long term, and software is definitely increasing in importance.

Oct 05, 2009
Mike McClain said...
Great post. Companies had better be focused on change and support the change agents within their organization. While the economy seems soft and difficult right now the future looks bright for the organizations that can focus on innovation.
Oct 24, 2009
dsd said...
madarchod

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