Ray Lane, former Oracle president and chief operating
officer and now a venture capitalist, has said the
software industry is maturing to become a service-oriented
business.
Lane, who was speaking at the Open Source Business Conference in
San Francisco, touched on topics such as open source, and the
hiring of overseas engineers.
“The industry is at a watershed again,” said Lane, who now
serves as a general partner at Kleiner Perkins Caulfield and Byers.
While the software industry has become one of the largest in the
world, it still delivers complex solutions that are not integrated,
leaving users to make them work.
With the industry maturing, companies need to focus on providing
software as more of a service, said Lane, citing online CRM company
salesforce.com as an example of a company providing a service
instead of selling applications.
“Software is a service. We have to recognise it and a service
company is a different DNA than a software company.”
Lane said it was rather like someone interested in getting into
the car business would more likely get into service business that
improves the car experience rather than get into car-building or
car parts.
He also said open-source software presents benefits in areas
such as lower total cost of ownership and faster bug responses, but
that it does have challenges to overcome, including support, lack
of a roadmap, and not being known for innovation,.
Open software is affecting companies such as Microsoft, he said.
“Microsoft is only three times Linux now and rapidly
shrinking.”
The software industry, he added, is still waiting for the next
big thing He listed developments such as the PC, client-server
computing, and operating systems as examples of previous “next big
thing” developments.
“It’s idiomatic about our industry as to why the question is
even asked. We expect the next big thing to come along to get us
out of implementing the old thing,” Lane said. “If you really want
to wait for the next big thing, I think the wait’s probably a
decade.”
He added, “Going into the rest of the decade, the new enterprise
basically has to pay attention to spot demand.” To cope with this,
companies need to avoid fixed assets, including labour costs.
While the so-called “new economy” was supposed to provide an
advantage in the US through aggressive use of IT, discussions
instead arose as to whether IT even matters, Lane said. “What we’re
experiencing now is normalcy.”
The new economy was followed by meltdowns in financial markets,
scandals, bankruptcy, wars, and terrorism, but it did somehow
survive, Lane said.
It also produced the use of the internet and knowledge workers
able to work anywhere in the world because of English adoption.
India and China have educational systems that enable them to
provide engineers in a way that the US cannot, he said, adding that
Silicon Valley will not hold onto its technical advantage
forever.
Paul Krill writes for InfoWorld