In the last few months I have come to a rather startling conclusion. Pretty soon if you are not a software company then you are probably not going to be a company.
This might sound a bit extreme but the more time I spend talking to smart people and the more I look around at the ecosystem I inhabit, the more I become convinced that it's true. I don't mean that you will need to be a company selling software just that you will need to be developing it in one way or another. There is a phrase that is used quite a bit these days which was originally coined by Marc Andreessen back in 2011 in an article he wrote for Wall Street Journal – 'software is eating the world'. This isn't the first time I have referred to this in one of my articles and I am pretty sure it won't be the last because that phrase is resonating more and more. The more I visit companies and talk to senior executives the more I see software driving change in business.
The fact is for more and more companies' software is no longer just about operational support, it's a foundation for growth. And because it has become so much more integral (and interactive) it can no longer be something that is simply bought and installed. Software has been central to how a business operates for years but now it has become part of an organisation's DNA and brand. Being 'part of our DNA' is a well used (and misused) phrase but in the case of software today it is actually a perfect metaphor.
Like DNA, software these days is made up of thousands (if not millions) of different components that can be combined in an almost infinitesimal number of ways. Nothing can function without it and by experimentation or prototyping with it we can innovate or connect a whole range of different functions. To a degree it has become componentised and yet at the same time that process has actually made it more open and accessible and therefore more usable, easier to work with and more valuable
In a recent article I talked about the fact that these days innovation in business comes from software companies. It is a subject that John Donovan, CTO of the FT and I agree on. We recently attended the Web Summit in Dublin together and both of us came away with a real sense that we are now at a tipping point at which it is no longer business needs that drive software development, but software that is driving business development.
"When you look at the companies that are making waves right now a huge number of them were originally tech-based start-ups. They weren't spun out of existing companies, they didn't emerge from within their sectors, they emerged from a group of people who were able to combine technical and business know how. You could argue that Apple is the grandfather of them all but today's industry giants have taken it a step further. Apple produces technical products but eBay doesn't, nor does LinkedIn or Facebook or more recently Uber or AirBnB," says Donovan.
This is a little ominous for established businesses today. What it tells them is that if they don't start innovating themselves they are going to be overtaken pretty quickly. If you look at the media industry today there are very few broadcasters who aren't looking over their shoulder at YouTube, Netflix and Amazon and wishing they were the ones who had the bravery to push the boundaries of what was possible online, first.
Although companies should be afraid they should also understand the opportunities that are in front of them if they start to think a little differently. Amazon is no new kid on the block but it has stayed ahead of the pack by constantly reinventing itself. It is the best example of a company that isn't just unafraid of change and disruption, it positively embraces it. It understands that what makes the company valuable isn't what it is providing on any given day but the culture of constant change and fearlessness that provides its strategy and direction.
And that leads me to the essence of what I am trying to say. Essentially the most successful businesses today are no longer really about what they do but who they are. They use technology as a vast tool kit to enable them to reinvent themselves constantly. They understand that the ability to use software creatively delivers huge competitive advantage. They don't worry about what happens if they get things wrong because failure is not to be feared. Stagnation, procrastination and complexity are. There are a growing number of tools now available that give you access to the innovation happening in software and to the community that is making it happen. Tools like Spree make agile ecommerce far more accessible while platforms like GitHub are a doorway to a world of Open Source opportunity.
Despite all this what worries me is that is seems that the gulf between those at the forefront and those in the rear-guard is actually widening. For every ASOS and Amazon there are tens if not hundreds of retailers who haven't even got as far as embracing mobile properly. And with retail phenomena's like Black Friday arriving from across the pond, an inability to take advantage of surges in demand will mean it isn't just your website that crashes – it's the entire business.
The fact is that doing nothing is no longer an option. As I have said before (and will no doubt say again) there is no business out there that can afford to stand still and the longer you wait the further you will have to go to catch up.