Have you observed that the value of software as a product is diminishing, but the value of software as an enabler is rising?
Pure play software companies such as Microsoft and Oracle are fading in comparison to rising stars such as Google, Facebook, Apple, Amazon and newer ones like Snapdeal, Paytm, Flipkart, Uber and others. None of the new age companies sell “software”. They all sell a service (or devices, in case of Apple). This was described well in a free ebook called “Software Paradox” lately.
Now companies even prefer giving away their software innovations as open source so that they can get the respect of the developer community that they desperately want to attract. GitHub, Facebook and many open source projects give away software for free. So there is a clear trend of companies collaborating on an infrastructure and tool level and yet being able to create a lot of value in the services they provide.
“The book suggests what pure-play software product companies should do in order to survive this next wave”.
There are a lot of great options described which range from moving to a subscription model to becoming a full-stack startup (doing very deep vertical integration in the markets they operate). In the context of pure play software product companies, where do we in India stand?
“Every new startup like snapdeal, flipkart, housing.com and the likes are powered by finely engineered, innovate, reliable software technology. But they do not charge for the software. Instead they enable their Business or Service with the help of this software”.
My conclusion is that India has already leapfrogged to “Service-Based Software Business Model”. The number of new startups and deals in the e-commerce and classified marketplaces domains greatly out number startups that have a technological innovation at the heart of the business. The aspiration of the entrepreneur who starts up today is to build the next Flipkart, not the next Google.
This is something we all will have to learn to accept. Like so many modern innovations we love using today are ones we did not invent, software is something we will rather use. Innovation in technology requires an intellectual rigour and ecosystem support that the critical mass of indians wouldn’t reach easily. But I still hope that at least a few few million software developers out there would achieve.
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