Software companies are about to disrupt many more industries

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 technology companies that are invading and overturning established industry structures. Over the next 10 years, many more industries will be disrupted by software, with new world-beating companies doing the disruption in more cases than not. With lower start-up costs and a vastly expanded market for online services, the result is a global economy that for the first time will be fully digitally wired.

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There are many dramatic examples of this phenomenon of software eating a traditional business like,

Books:  The suicide of Borders and corresponding rise of Amazon. Today, the world’s largest bookseller, Amazon.com, is a software company—its core capability is its amazing software engine for selling virtually everything online, no retail stores necessary.

Today’s largest video service by number of subscribers is a software company: Netflix, not Blockbuster. Now other traditional entertainment providers are facing the same threat. Comcast, Time Warner Cable and others are responding by transforming themselves into software companies with efforts such as TV Everywhere.

Music: Dominant music companies are software companies too, Spotify & Pandora.

Entertainment/Videogame: Fastest growing entertainment companies are videogame makers, again software like Zynga, that delivers its games entirely online and Rovio(Angry birds). Meanwhile videogame biggies like Electronic Arts and Nintendo are being pushed to innovate or die.

Movies: Best new movie production company Pixar was a software company, Disney had to buy Pixar to remain relevant in animated movies.

Photography: All photos that you take today have a software powered camera and photos are uploaded automatically to the Internet for permanent archiving and global sharing. Companies like Google Photos, Snapfish and Flickr have stepped into Kodak’s place.

Telecom: Today’s fastest growing telecom company is Skype, a software company that was just bought by Microsoft (another software company). Meanwhile, the two biggest telecom companies, AT&T and Verizon of US, have survived by transforming themselves into software companies, partnering with other smartphone makers.

Recruiting: LinkedIn is today’s fastest growing recruiting company, giving LinkedIn the opportunity to eat the lucrative $400 billion recruiting industry.

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Automotive: In today’s cars, software runs the engines, controls safety features, entertains passengers, guides drivers to destinations and connects each car to mobile, satellite and GPS networks. The trend toward hybrid and electric vehicles will only accelerate the software shift—electric cars are completely computer controlled. And the creation of software-powered Google Self-Driving Car Project is already under way at Google and the major car companies.

Retail: Today’s leading real-world retailer, Walmart uses software to power its logistics and distribution capabilities, which it has used to crush its competition. Largest direct marketing platform is a software company—Google. Now it’s been joined by Groupon, LivingSocial, Foursquare and others, which are using software to eat the retail marketing industry.

Logistics: FedEx, which is best thought of as a software network that happens to have trucks, planes and distribution hubs attached.

Airlines: Success or failure of airlines today and in the future hinges on their ability to price tickets and optimize routes and yields correctly—with software.

Natural Resources: Oil and gas companies were early innovators in supercomputing and data visualization and analysis, which are crucial to today’s oil and gas exploration efforts.

Agriculture: is increasingly powered by software as well, including satellite analysis of soils linked to per-acre seed selection software algorithms.

Finance: This industry has been visibly transformed by software over the last 30 years. Practically every financial transaction, from someone buying a cup of coffee to someone trading a trillion dollars of credit default derivatives, is done in software.

Defense: is increasingly software-based. The modern combat soldier is embedded in a web of software that provides intelligence, communications, logistics and weapons guidance. Software-powered drones launch airstrikes. Intelligence agencies do large-scale data mining with software to uncover and track potential terrorist plots.

Health care and education, are up for software-based transformation. Both of these industries, have been highly resistant to entrepreneurial change, are primed for tipping by great new software-centric entrepreneurs. And the impact has already started, think Coursera, Khan Academy, Udacity, etc.

We’re in the middle of a dramatic and broad technological and economic shift, in which software companies are poised to take over large swathes of the economy.

Companies in every industry need to assume that a software revolution is coming. Instead of questioning their valuations, let’s seek to understand how the new generation of technology companies are doing what they do, what the broader consequences are for businesses and the economy.

The biggest impact of this is going to be on Jobs. Developers are rapidly finding ways to put future developers out of jobs. Much has been made about how the dropping cost of website infrastructure has spurred a boom in startup formation, with Cloud computing as the prime example. The capital cost of servers has been eliminated, but even more important is the plummeting human cost.

How the startup landscape is changing.
The knowledge of the world’s leading experts is available as an API for a fraction of their former salaries.

A decade ago, a VP of engineering at a startup might have evaluated the resumes of five solid front-end engineers. Five years ago, that VP would have looked at GitHub profiles. Today, they’re just as likely to evaluate a front-end framework like Ionic, Meteor or Aurelia and build it themselves. It’s not just front-end options. We’ve seen a massive proliferation in frameworks, libraries and other tools that allow a single talented engineer to do the work of a team.

Companies and products like Heroku, Celery, RabbitMQ, Mandrill, Fastly, Chartio, Chargebee, Shipwire, Docker, Codeship, Rainforest QA, Replicated and Chartbeat have changed the nature of tech development. These are just a small subset of services that replace the work of individuals or entire teams.

In the absence of these services, startups would have to hire one or more employees to fill the role. Instead of bringing on new employees, they can empower a small team of engineers and designers to multiply their efforts.

In the new world, Full-Time Employees will become APIs

But I can’t build a Startup this way…or can I?

These tools have made it possible to make almost anything, fairly easy. Sure, building something as complex as Google is going to be a challenge no matter what, but it’s unprecedented how far these tools can stretch the creator’s power.

A decade ago, building “real-time” services would have necessitated hiring one or more back-end specialists. Today, you can insert a few lines of code from Google’s Firebase and get the same effect. Front-end designers leverage JQuery in much the same way. Tasks that would have made for full-time job descriptions just a few years ago are now bullet points on a job posting.

Imagine the power of tools such as Bubble. While their tagline, “build your startup by pointing and clicking,” might not be applicable to everyone today, but within 10 years we will see at least one unicorn built without writing a single line of code.

APIs are truly democratizing startup creation. Not only will you practically need no money to get started, you won’t need any tech skills either. All you will need is a keen understanding of the user and how to take your product to market. This has major implications in terms of pace of product development, but it is great for consumers. Anyone with a great idea anywhere in the world can build a billion-dollar tech company. That’s exciting!

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What is code? Why is everyone talking about it these days?

We know that when we enter code into a computer, we get software.  And we know that software is part of the fabric of our lives – from the computers in our cars to the ATMs that spit out our money, and to the switching channels on our cable boxes, our lives are run by software. But how does all that actually happen? Not everyone knows how code actually works and why it’s so important.

This video takes the confusing subject of coding and makes it understandable, while offering fun exercises throughout to demonstrate each point.

Whether or not you are interested in coding yourself, it’s worth learning how software and technology work, since they’re eating the world. This might be the most entertaining, thorough, and easiest way to do so.

I’ve read this in the last few years many times, and since then try going through it, at least once a year, and it shakes me up every time. Just imagining, that everything is & eventually will be software powered in itself is a huge thing.


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