Why software matters – from hardware to software

Posted on by emlandre

In the first post I argued that software matters because it is the tool organisations have to encode information and knowledge so it can be effectively used, and that the firms being good at it will gain competitive advantage.

But computers have been around for decades, so what is it that have changed? The simple answer to that question is cost and performance. Thirty years ago, buying a computer was a serious business decision. The effect: computers was used only for the most valuable tasks at hand.

Today, computers are almost for free. Most of us have more computer power in our pockets than the one that was used to control the Apollo missions to the Moon. With the cloud offerings from companies such as Amazon, Microsoft and their likes, data centres have become commodities. Large organisations who have been running their data centres for years strive to understand this, while new companies exploiting it is started every day.

With data centres as commodities, competition, innovation and investment has moved from hardware to software. Competitive advantage is gained by being better than your competition in collecting data and to develop the software that transform your data into information and knowledge, and by doing so become learning organisations.

At the time of writing this is most visible for the Internet based businesses such as Facebook, Netflix and their likes. More traditional companies and industries will face the same race and now is the time where the actors positions themselves for the race.

So, what should firms do? Move your human resources away from tweaking computer hardware to writing high impact software.

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Published by emlandre

Einar Landre is a practicing software professional with more than 30 years’ experience as a developer, architect, manager, consultant, and author/presenter. Currently working for Equinor as lead analyst within its emerging digital technologies department. He is engaged in technology scouting, open source software development (OSDU) with a special interest for Domain Driven Design, AI and robotics. Before joining Equinor (former Statoil), Mr. Landre has held positions as consultant and department manager with Norwegian Bouvet, Development manager of TeamWide, technical adviser with Skrivervik Data (SUN & CISCO distributor) and finally software developer with Norsk Data where he implemented communication protocols, operating systems and test software for the international space station. Over the last years Mr. Landre has become an active member of the professional community, where he has been author and coauthor of several papers presented at OOPSLA, SPE and Saturn. He has presented at several international conferences in Europe and the US. His professional interests include object oriented programming, enterprise application architecture, multi-agents, autonomous systems design, requirements analysis and specification, use of systems engineering practices, agile methodologies and leadership in high-tech organizations. He is a member of the ACM and the IEEE Computer Society, as well as the SPE (Society Petroleum Engineers). Mr. Landre holds a MSc in Information Technology from the University of Strathclyde, is an IEEE certified software development professional (CSDP) and lives with his family in Stavanger, Norway.

4 thoughts on “Why software matters – from hardware to software”

  1. I would also argue that hardware size is a major driver for the strong software evolution we see now. The fact that we’re now able to build devices at the size of pens and pennies that outperforms state of the art computers 30 years ago – both in cost, capacity, processing power and low electrical power consumption – is a significant cause for the extended use, and it will increase still.

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