To be sure, even in the U.S. financial markets failed for a long time to recognize the potential of the software industry. Marc Andreessen, founder of Netscape and successful venture capitalist outlined the case for the transformative nature of the software industry in a widely discussed article in the Aug. 20, 2011 Wall St. Journal. He titled the article, “Why Software is Eating the World.”
He pointed out that more and more businesses and industries are based on software and delivered as online services-from movies to agriculture to national defense. Those driving these transformations are Silicon Valley style entrepreneurial firms which are invading and overturning established industries structures.
Amazon is representative of this movement with its software engine for selling virtually everything online. Similarly, mobile phones and photography have been turned into software industries. The most “primitive” of manufacturing industries like furniture making increasingly depends on software to assess consumer trends, design, build and deliver their products in a timely fashion. Logistics and distribution is increasingly a software-driven industry and needless to say, the automotive industry is rapidly moving in this direction as well. Google now dominates the U.S. retail marketing industry. It is impossible to imagine the financial services industry today without the driving force of software.
No industry is immune to these developments! Established business models are increasingly upended as incumbent firms often fail to adjust and new players enter the market. Airlines distinguish themselves from competitors by their software capabilities, through dynamic pricing of tickets and ability to optimize routes and yields.