Silicon Valley still hasn’t completely recovered from the scars from the heyday of Webvan and Pets.com. When the software industry started to gain momentum, investors considered another bubble and gave their opinion. Many new internet companies like Facebook and Twitter started sparking controversy in the Silicon Valley. We all know how the dot-com bubble companies plunged in the early 2000’s came into play. However, the software companies are very different from such internet companies.
Marc Lowell Andreessen ( an entrepreneur, investor and software engineer ) believes that many of the prominent new internet companies are building real high-growth, high margin, highly defensible businessesMark says that software cannot be considered a bubble because it has changed the world how it operates over the past 50 years. Today looking around we all can agree that everything has an ever-growing presence of software.
Software programming and internet services have made launching start-ups easy, due to lower cost requirements. The cost of running an internet based application has reduced to one-tenth of what it was about a decade ago.
Today the world’s largest bookseller, Amazon, is a software company. The largest video service by number of subscribers is a software company: Netflix. The dominant music companies are software companies, too: Apple’s iTunes and Spotify. Today’s fastest growing companies are videogame companies like Zynga (maker of games like Farmville). LinkedIn a software company is today’s fastest growing recruiting company.
Software is also eating much of the value chain of industries that are widely viewed as primarily existing in the physical world. This shows the dominance software has obtained today.
The article concludes by saying that software companies had successfully survived the period of an economic slowdown. This gives the indication that they can grow even more in future. Instead of constantly questioning their valuations, let’s seek to understand how the new generation of technology companies are doing what they do, what the broader consequences are for businesses and the economy and what we can collectively do to expand the number of innovative new software companies created around the world. The changes brought about by software will affect jobs and people need to enhance their skills, be aware of the changes brought about by software and accept the changes to still have a value-oriented job in the coming future.
Source: https://a16z.com/2011/08/20/why-software-is-eating-the-world/
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