The Software Companies of Tomorrow

I've written before about why the way we often perceive innovation is impaired because we instinctively frame it in an historical context; how does an innovation compare with what came before, what is its differential impact today? That's an instinctive way of thinking that's just hard to avoid, so it usually takes a while before we are able to form a more complete picture of how certain innovations can go on to become much more impactful than we initially perceive, or lead on to subsequent more impactful iterations.

While it's true that the last fifty years has seen a huge wave of progressive computerization borne of the microprocessor revolution, and which has transformed many aspects of the modern world, I think it's also true that we are only just beginning to recognise the real potential of computerization. And the scale and impact of an emerging new wave of computerization will be several magnitudes greater than anything we've seen before.

Marc Andreessen puts this far better than I ever could, but I'm convinced that we'll look back at the first wave of computerization of the last fifty years as the application of very rudimentary technology to discrete and largely classic business processes. A necessary first step but, in the grand scheme, no big deal.

However we are now beginning to spot the faint signs of a second, much larger wave of emerging computerization where it will be possible to build an entirely different kind of buinesses entirely from scratch, and one that will sail above many of the classic constraints and disruptions historically faced by businesses.

These new businesses will only adopt the classic business processes and rules that are mandated to them by their trading environment (law, accounting, fiscal, etc.) but otherwise will employ many fewer people and will instead deploy software at every customer touch point and use software in a highly integrated way to drive all their administrative processes, enabling them to operate and scale in ways that would have been inconceivable even five years ago.

These hyperbusinesses of tomorrow will resemble software programs more than they will resemble classic businesses and will - 

• Distribute their products and services more efficiently and for a fraction of the historical go-to-market cost.
• Operate customer service models that require fewer resources and deliver better service. 
• Communicate effortlessly with any chosen audience.
• Scale their core operations incredibly efficiently.
• Decide to operate globally almost at a whim.
• Leverage the integrated nature of their business, customers and suppliers to drive new products, service models and value.
• Rapidly displace old world competitors in the same way the software driven word processor displaced the mechanical typewriter. 

Software might have started off as an innocuous tool you deployed inside a business, but tomorrow we'll be deploying businesses almost entirely in software.

Surreality Check

This week I learned the price of integrity. 

Dennis Howlett is someone I've known for six years and whose opinion and insight stand out as the sharpest and most prescient in his domain.

Dennis can also be a cantankerous old geezer sometimes.

Dennis first floated into my universe in January 2006 when he voiced an opinion about an accounting software business of which I was the managing director. I thought his opinions lacked in a variety of areas and overall, he demonstrated a limited understanding of some key facts. On balance what he wrote about my company was negative and dismissive.

Which pissed me off. A lot.

So, I did what seemed like a reasonable thing and picked up the phone, unannounced, and challenged him.

Over the course of a 40 minute phone call I tested his viewpoint and informed it with my own views and opinions, and he in turn did the same.

We both left the call wiser. He later wrote about my buttonholing him here. 

And over the years since we've agreed and disagreed with each other on a variety of subjects, but we've always maintained a healthy professional respect. No lines have been crossed.

So, those who have sought to diminsh his reputation this week and the onlookers who have relished in the fallout are the one's whose stock has declined in my view. Not Dennis Howlett.

I'm told that I'm a genuine chap, and you won't find many people who'll question my integrity.

I'm also a good judge of character and my gut tells me I'm right about Dennis, even though he might blow hot and cold and play up to his 'shoot first and ask questions later' persona more than he ought to.

But who's perfect anyway. Plus, when all's said and done; life's too short.

And my personal experience also tells me that a simple phone call might have gone a long way.

Newtonian Apple

The most interesting thing about the iPhone 5 launch is not how little it's perceived to have changed over the prior generation, but why.

Roughly speaking, the iPhone accounts for around $60Bn of Apple's annual revenue, and that $60Bn is pretty cyclical in respect of the fact diehards upgrade every year and no-so-diehards every other year. Which means a huge chunk of that $60Bn is derived from existing customers and, more precisely, existing customers who know what they like. And they really like their iPhones.

So, you'd need brass balls to gamble $60Bn a year by making major deviations to a recipe that works. Which is a not insignificant problem for Apple.

We usually associate a lack of innovation with organisations that are in either decline or distress, or both, but the iPhone 5 is a great example of how creating the world's most successful product can lead to a situation where you need to deliberately retard innovation.

Which is actually a fascinating notion in the sense of Newton's third Law of Motion; where every action results in an equal and opposite reaction.

Fan Non-Fiction

I love the Mercedes SLS. So, I CG animated some scenes of a 3D model in Vue Esprit 10 - which took around 80 hours of computer time - and then composed them into this TV ad style clip in Final Cut Pro X set to some mood music.

Actually a lot of fun. Apart from the 80 hours part.

It's a series of tube

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