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Aren’t software businesses increasingly like service businesses though? They deliver now often with backend cloud storage, update near continuously, integrate
by mapgrep 7y ago
Aren’t software businesses increasingly like service businesses though?
They deliver now often with backend cloud storage, update near continuously, integrate frequently with outside services, sometimes open source major components iteratively, typically have an evolving API and developer ecosystem to educate, and are sold as subscriptions. It’s not as “human in the loop” as some of the AI described in this article but it’s clearly moving toward services in terms of margins.
Nothing is like the old shrink wrapped software business, basically.
- inthewoods 7y agoNot from what I see - what I see is software companies using services as a way to shorten time-to-value for the customer. They do this either themselves or via professional services firms. To me, the services you describe are software-as-a-service - they scale well without adding more humans to the mix. Services businesses, in contrast, generally need more humans to do more work. I do think you are right that we are entering an age where the margin pressures will continue to increase. As the Amazon quote goes "your margin is my opportunity." In that world, strength accrues to the largest players - which is why AWS is so strong. I like to joke that AWS should refund money to the startup that buy booths at re:Invent only to find out AWS is rolling out a competing service (with the acknowledgement that AWS entering a space doesn't necessarily mean the end of the competing company.)