Some years ago I participated in a research project in which we examined the future of software; even then, in the mid-1990s, it was apparent that change was afoot. The software industry was oriented towards the needs of developers rather than users and was slow to deliver the flexibility and functionality that users required. Our contention was that a radical shift was required in the development of software, “with a more demand-centric view, leading to software which will be delivered as a service within the framework of an open marketplace”.
Opening up the software industry
Thus the idea of ‘software as a service’ was conceived almost twenty years ago and for many users is now a reality; cloud computing for example, providing on-demand software priced on a pay-per-use basis. The software industry has undergone a revolution and change continues apace as development tools, such as App builders, are placed in the hands of enterprising youngsters, and a new generation of children are being introduced to software development through accessible languages such as those taught in codecademy.
You don’t have to be Einstein to program
So what about the future?
Users have evolved from passive consumers to active participants; software has become more pervasive underpinning not only business but also social, governmental and entertainment applications. At the same time the IT, telecoms, media and entertainment industries have converged.
The future of software is no longer simply in the hands of the traditional software companies but is the concern of governments and society. Governments began asking questions about control and future economic value of the industry and in 2007 the World Economic Forum began working on scenarios for the future to help governments understand the policy and regulatory challenges. Possible scenarios were developed for the year 2015.
Scenarios for 2015: Key questions
- Who will lead/control social and economic value creation in the future? Industry or users and communities?
- Will the digital environment be: an open system or a closed system?
The chart shows 3 possible scenarios for 2015.
Scenarios for 2015
Scenario 1: Safe Havens describes a digital world in which online security concerns create a clamour from consumers, businesses and governments for virtual safe havens. Industry responds by vertically integrating to create secure walled environments that provide all digital services. (industry controlled – closed environment)
Scenario 2: Middle Kingdoms describes a digital world in which consumers, governments and forward-looking businesses push for interoperability, enabling a bewilderingly wide array of niche offerings to become viable propositions – and a digital ecosystem dominated by intermediaries that effectively connect users to like-minded individuals and to their highly specialised suppliers that can best meet their needs. (industry controlled – open environment)
Scenario 3: Youniverse describes a digital world in which the rise of organic grassroots communities as powerhouses of economic value creation turns traditional business thinking on its head. This leads to the rise of new organisational structures and to digital experiences that are highly personalised. (organic and community led – open environment)
Future Scenarios in more depth
This short 5 minute video explains the scenarios in more depth.
To some extent all three scenarios are in existence today with the community groups in scenario 3 being somewhat uncomfortable with the industry controlled, closed environment in scenario 1. The winner in scenario 2 is the IT consultant who matches the wide range of offerings to the requirements of specific companies.
What happens next?
Recent major disruptors for the software industry include the rise of social media, the take-up of mobile devices, cloud computing and the growth of ‘big data’. According to Mark McCaffrey of PWC ‘buyers and consumers of software are changing, they don’t want to buy software and they want it delivered over multiple channels’. They want to ‘use as you go’ with no investment upfront.
What happens next in the software industry depends on the next generation and it is heartening to see a growth in coding classes in local communities and total overhaul of the ICT curriculum in schools. Consumers are increasingly interacting via Apps which can be built by relatively inexperienced developers. it may be that the future for software as a service is not only ‘use as you go’ but also ‘design, build and use as you go’ !
Any comments gratefully received.
service innovation cases 