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The emphasis is on "core" - software is just a tool to enhance the core business as you're pointing out. If the bakery's core business sucks but they are great

The emphasis is on "core" - software is just a tool to enhance the core business as you're pointing out. If the bakery's core business sucks but they are great at software they will still suck as a bakery.

kareemm 15y ago
I may have missed this, but I didn't get that the article talked about every company's core business now being software. I understood his argument to be that software developers are becoming increasingly valuable, and outsized returns will go to firms that understand this and learn how to treat software developers well to leverage what they're able to do to any industry.
- yourapostasy 15y ago
  ...but I didn't get that the article talked about every company's core business now being software. Here is a quote from the article where he lays out the Andreessen Hypothesis[1], and links to David Kirpatrick's article that restates that hypothesis into a format more readily grasped by business readers[2]. Which brings us to David Kirpatrick’s now famous line that every company is now a software company. We are only just beginning to understand how software is now the core function of every company, no matter what it makes or what service it actually provides. I have some reservations about these kinds of sweeping proclamations (which if I posted would turn into a tl;dr for most people), as they miss a lot of the nuance of the situation on the ground. That might be deliberate, as part of consulting at these guys' level is to get clients hooked on the sizzle of a catchy idea, then sell them the steak of the nuances you've worked out. [1] http://online.wsj.com/article/SB10001424053111903480904576512250915629460.html http://online.wsj.com/article/SB1000142405311190348090457651... Not that Andreessen was the first to realize this of course, but he just happened to catch the news cycle with his verbalization of this observation at the right time to break into a more mainstream meme, that many in the industry already either tacitly or explicitly acknowledge. [2] http://www.forbes.com/sites/techonomy/2011/11/30/now-every-company-is-a-software-company/ http://www.forbes.com/sites/techonomy/2011/11/30/now-every-c...
  - kareemm 15y ago
    Thanks for this. I think there's a subtle distinction at play here: having software as a core function of your company vs its core business. I think you're still in the publishing / music / insert_industry business; software becomes a core function of your business. But I don't think your core business necessarily becomes software (though it could).
yourapostasy 15y ago
I'm wondering if everyone enamored of this meme is thinking that software will allow industries to change the very definition of "core". I don't know anything about the bakery business, but scratching my head over your very good question led me to posit some "what if's" to try to find ways to change the "core" of a bakery business. Hopefully these corny off-the-cuffs will get the gist across of how some think this trend will redefine the "core" of various businesses. What if the bakery was built around an automated production system driven by software that lets a master baker key in the latest recipe tweaks to a baked good product that works great in a small batch, and automatically works out the changes necessary to scale it up (or maybe it is so automated that it can mass produce in small batches), sets up A/B testing in limited distribution areas, and measures the results...the very same day that the tweaks are made? Or it can permute variables in the first production run, yielding a few dozen samples laid out in an array, let the master baker (or apprentices) taste test, tell the system what result to modify, and dynamically adjust, permuting in a day of testing what would take a conventional bakery a week or more to work out what to do in production? What if the automated system is so modular and flexible that it can do whatever a human baker can do, simply by watching a baker perform a single rendition (with appropriately-instrumented tools to sense pressure, flow, orientation, etc.)? What kind of competitive advantage would it confer (if any) to allow a bakery to start mass producing baked goods on demand for special promotions and occassions, in the time it takes a conventional bakery to produce a single prototype? What if the marketing department has software that enables them to set up A/B testing for a different package artwork, and tweak it day-by-day, comparing against historical sales data and adjusting for economic conditions? What if the sales department has software that can deduce the relative stock levels of competitors from the phone cam video taken by delivery and stocking employees of the bakery that stock at grocery retailers, and pounce to deliver more stock when the competitors are running low on stock but won't know until a couple days from now on their regularly scheduled stock deliveries? These what-if's do not really apply to the baker that only wants a small corner bakery in the European style, serving only the neighborhood within a walkable distance, and taking a craftsman's approach to their pursuit of their art and livelihood. For that context, I believe you are right: the core business is all that really matters, and software is merely a tool for reducing frictional costs of doing business. I suspect Andreessen, Kirkpatrick, and Rao are thinking of mid-size and larger-scaled businesses when they discuss this observation/trend. The huge assumption here is that the flexible fabric of software bytes is translated across into some directable and malleable bits in the real world. That happens, but it many times doesn't come cheap. I wonder if the proponents of this trend are vastly underestimating those costs.

kareemm 15y ago

I may have missed this, but I didn't get that the article talked about every company's core business now being software. I understood his argument to be that software developers are becoming increasingly valuable, and outsized returns will go to firms that understand this and learn how to treat software developers well to leverage what they're able to do to any industry.

yourapostasy 15y ago
...but I didn't get that the article talked about every company's core business now being software. Here is a quote from the article where he lays out the Andreessen Hypothesis[1], and links to David Kirpatrick's article that restates that hypothesis into a format more readily grasped by business readers[2]. Which brings us to David Kirpatrick’s now famous line that every company is now a software company. We are only just beginning to understand how software is now the core function of every company, no matter what it makes or what service it actually provides. I have some reservations about these kinds of sweeping proclamations (which if I posted would turn into a tl;dr for most people), as they miss a lot of the nuance of the situation on the ground. That might be deliberate, as part of consulting at these guys' level is to get clients hooked on the sizzle of a catchy idea, then sell them the steak of the nuances you've worked out. [1] http://online.wsj.com/article/SB10001424053111903480904576512250915629460.html http://online.wsj.com/article/SB1000142405311190348090457651... Not that Andreessen was the first to realize this of course, but he just happened to catch the news cycle with his verbalization of this observation at the right time to break into a more mainstream meme, that many in the industry already either tacitly or explicitly acknowledge. [2] http://www.forbes.com/sites/techonomy/2011/11/30/now-every-company-is-a-software-company/ http://www.forbes.com/sites/techonomy/2011/11/30/now-every-c...
- kareemm 15y ago
  Thanks for this. I think there's a subtle distinction at play here: having software as a core function of your company vs its core business. I think you're still in the publishing / music / insert_industry business; software becomes a core function of your business. But I don't think your core business necessarily becomes software (though it could).

yourapostasy 15y ago

I'm wondering if everyone enamored of this meme is thinking that software will allow industries to change the very definition of "core". I don't know anything about the bakery business, but scratching my head over your very good question led me to posit some "what if's" to try to find ways to change the "core" of a bakery business. Hopefully these corny off-the-cuffs will get the gist across of how some think this trend will redefine the "core" of various businesses. What if the bakery was built around an automated production system driven by software that lets a master baker key in the latest recipe tweaks to a baked good product that works great in a small batch, and automatically works out the changes necessary to scale it up (or maybe it is so automated that it can mass produce in small batches), sets up A/B testing in limited distribution areas, and measures the results...the very same day that the tweaks are made? Or it can permute variables in the first production run, yielding a few dozen samples laid out in an array, let the master baker (or apprentices) taste test, tell the system what result to modify, and dynamically adjust, permuting in a day of testing what would take a conventional bakery a week or more to work out what to do in production? What if the automated system is so modular and flexible that it can do whatever a human baker can do, simply by watching a baker perform a single rendition (with appropriately-instrumented tools to sense pressure, flow, orientation, etc.)? What kind of competitive advantage would it confer (if any) to allow a bakery to start mass producing baked goods on demand for special promotions and occassions, in the time it takes a conventional bakery to produce a single prototype? What if the marketing department has software that enables them to set up A/B testing for a different package artwork, and tweak it day-by-day, comparing against historical sales data and adjusting for economic conditions? What if the sales department has software that can deduce the relative stock levels of competitors from the phone cam video taken by delivery and stocking employees of the bakery that stock at grocery retailers, and pounce to deliver more stock when the competitors are running low on stock but won't know until a couple days from now on their regularly scheduled stock deliveries? These what-if's do not really apply to the baker that only wants a small corner bakery in the European style, serving only the neighborhood within a walkable distance, and taking a craftsman's approach to their pursuit of their art and livelihood. For that context, I believe you are right: the core business is all that really matters, and software is merely a tool for reducing frictional costs of doing business. I suspect Andreessen, Kirkpatrick, and Rao are thinking of mid-size and larger-scaled businesses when they discuss this observation/trend. The huge assumption here is that the flexible fabric of software bytes is translated across into some directable and malleable bits in the real world. That happens, but it many times doesn't come cheap. I wonder if the proponents of this trend are vastly underestimating those costs.