Software eats your company in 3 steps

We know that software is eating the world — becoming a bigger and bigger component of products and services. Now, we are seeing the next steps. Software will eat your company in three steps — product, cloud, and ecosystem. Some of the world’s biggest and most interesting companies are currently at step 2 — linking products and data into a cloud of services.

1) Product

Products and services contain more software every year. We’re all aware of this because it has been happening for 40 years. We might not be aware of how aggressively the trend is accelerating. Continuous delivery accelerates this trend. Software is not only faster, better, and cheaper in many current uses, but also improving faster than either hardware, or humans.

If you have a choice, you will keep your hardware the same, and make rapid revisions to the software. The same choice is likely to come up with human professions like driving and medical diagnosis. If you can replace a person with software, you have more ways to reliably improve performance.

2) Cloud

The next step is to link products and data together into a cloud of services. For example, Apple likes selling you an iPhone and a Macbook, but they love the idea that you will be a customer for iTunes and iCloud and other Apple products and services long after those devices are trashed. In the past they were organized into product silos, and now they want those product silos to work together on an integrated set of cloud services. The same thing is happening at Cisco, GE, GM, and many other product companies, right now.

To create unified cloud services, these companies need to put their discrete products into a shared test system. The first implementation step is often forcing these groups to use the same continuous integration infrastructure.Then, those discrete products can be used by the new unified services. I am seeing this pattern now.

3) Ecosystem

You are linked in an ecosystem, and increasingly, you are linked by Web services. This is happening in banking, health care, software development, government, and Internet of Things. To link with your friends, customers, suppliers, and frenemies, you can use the same methods of testing and integration that are used to unite product silos in one company.

Banking is usually a late adopter of technology. However, in this movement to ecosystems of Web services, I think banks are starting to lead. There is a lot of innovation in payment systems, and the payment systems each have to talk to banks and each other. Banks are starting to provide external API’s, and startups have formed to help them do it. Internet of Things is being designed as an ecosystem from the very beginning. The Industrial Internet Consortium is leading with the idea of a shared testbed that helps devices work together.