Former Oracle chief hails services-based software

Ray Lane, former Oracle president and chief operating officer and now a venture capitalist, has said the software industry is...

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 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

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