I’m a software engineer by training, somewhat by practice, and, in a sadly diminishing way, by mindset. Maybe some of the real engineers around me can back me up on some of that. (Please?)
So it is with a heavy heart that I say that software technology has become a commodity. Evidence is everywhere:
- Increasingly, technical work is contracted out to third-party developers, sometimes offshore. “Here’s a spec; how cheaply can you build it?”
- Platforms are getting faster every day. You can stand up a Rails site now orders of magnitude faster than what you could do just a few years ago. Hell, you can configure a WordPress site to do almost anything you want orders of magnitude faster than a Rails site, for free. Why stop there? You can pick-and-click your way to a Ning site orders of magnitude faster than configuring a WordPress site. (I know all those technologies/platforms don’t serve the same need, but you get the idea.)
- Software technologist supply is increasing; i.e., there are more software developers now than ever. The ease of building things is dropping the bar so low that a 17-year old kid can build Chatroulette in a few days. Culture and technology is changing so that everyone can be, and is becoming, a technologist.
- Costs of apps are dropping. Mobile apps cost $0.99, not per use, not monthly, but once ever. That’s because it takes a 17-year old a few days to build it. If you make $500 on your app, you’re ecstatic.
There’s nothing terribly radical about this observation; I’m sure it’s out there everywhere. It is very interesting to me, though, to take it to its logical conclusion.
Imagine if technology becomes so easy, so ubiquitous, so accessible that if you can imagine it, you can build it (or have it built) for nearly free. I think we would all agree that that’s where we’re headed, amazingly quickly. How would the software/internet industry change?
My take (thanks for asking) is you end up with something like the mass-market clothing industry (forget haute couture for this comparison).
Stick with me for a bit. Now, I won’t pretend to really know the clothing industry, but my naïve view is that it’s driven by designers and marketers. The “builders” are outsourced to the cheapest suppliers possible such that if a designer can imagine it, they could have 20,000 units drop shipped to their warehouse in a week. The success of a designer or a retailer or a brand is never about whether it can be built, or how efficiently it can be built, or how cheaply can it be built, but is only about whether enough people will buy it.
You can already say the exact same thing about the software industry, and I run into this all the time at Intuit. An engineer or architect will have or hear about an idea and jump straight to the standard question: how are we going to build it? They start thinking about data models, class structures, engineering processes, etc., stuff that I personally love arguing about.
But whenever I’m in these conversations I ask the same questions: what is the big unknown about whether or not this will be a successful idea? “Can it be built?” or “How efficiently can it be built?” is almost never the issue. Put another way: if you ask the engineer/architect if they think it can be built, their answer is always “Of course”; if you ask them if people will actually use it/pay for it, the answer is typically “I don’t know”. Voila, your big unknown.
I’ve rambled on for long enough, but I’d love to know what people think. I actually have many, many more thoughts of what the software/internet world would be like with free technology, but strangely, they all have one common theme: we’re here already.
Brian Greenbaum said:
It’s good to see you blogging again Thai!
You hit it right on the head–in a world where technology is commoditized, product differentiation can only be achieved through excellence in design and marketing. And when communication is fully commoditized and we have working filters at the ready to sort through the deluge of ratings, reviews, tweets, and posts, the only thing that will matter is product design. Can you tell where my bias is? 🙂
Unfortunately we don’t live in that world yet. The consumer product space is most influenced by end user design, although marketing is still highly influential. We also have terribly designed market leaders in education, non-profit, government, enterprise, and small business where the product that wins is the one with the most features sold by the most compelling sales person.
It’s not all doom and gloom for the technologist. There will always be a need for killer computer scientists. Who else is going to figure out how to send spaceships to Mars? But if were a kid today interested in working in the technology industry I’d pick up a book by Tufte over a book by K&R.
Thai Bui said:
Yes, I can tell where your bias is 🙂
I don’t think, however, that marketing communication will every be commoditized so that design alone will be the differentiator. Brand management, sales, commercial innovation, messaging, that is, the components of marketing are incredibly powerful things. I think it would be extremely difficult to say that the mass-market clothing industry is fought on design alone.
Take it even further. Is there a market more commoditized than soda/cola/beverages? That is a whole industry where success and failure is based on marketing and it has been that way for decades. And guess what? There’s still a lot of any to be made for the winners and will be for a while.
And do you think the vogue design king Apple fights on design alone? Their advertising budget for 2008 was $486M (http://techcrunch.com/2008/11/21/yup-apples-advertising-budget-is-bigger-than-microsoft-vistas/), and I imagine their 2009/2010 advertising budget was/will be larger.
Brian Greenbaum said:
Nothing is absolute. Marketing communication will never fully go away, just like technological commoditization will never fully replace the need for true engineers. What I was driving at was the influence of marketing, or perhaps traditional marketing of advertising, branding, sales, and messaging will slowly become less relevant and effective because we will have at our disposable the preferences of the folks we really trust–our friends, family, and people we share an affinity with.
Why bother buying the Canon camera based on the messaging from the TV commercial when I can ask my friend Bob what he thinks of his? Or why should I buy that pair of designer jeans I saw an ad for in GQ when all of the reviews negative?
In my “the glass is half full” POV, I believe that peoples’ reaction to a product, the love+hate relationship we have with it and whether we’d buy it again or recommend it to a friend, comes down to the effectivenes–how well it solves the problem it was intended to solve. All of the messaging or branding in the world will not convince me that the alarm clock I just bought has the smallest snooze button and it’s impossible to hit when I’m half asleep. Products/services that are designed to be effective, not just marketed to be so, will be the ones with the most influence consumers.
However, there are still some very valid roles marketing will have to play.
Because we live in a capitalist society and we believe in competition, anyone with an idea and some capital can enter any market they choose. That means we have many more options than we actually need. It’s good in that products/services keep evolving for the better. It sucks because we collectively spend more time/capital/energy producing products that don’t really need to exist. Products/services compete for the fixed resource of our attention. We can’t try every product on the market. It’s impossible. All of our friends/family can’t try all the products on the market. So we still need some way to help us initially filter. But once the word is out, once the product/service has been tried, then the cat is out the bag and it (should) come down to whether the product works.
We also need a way to remind us of the products we do like and are designed well. You argue that that coke/pepsi/soda is perhaps perfectly commoditized and exists solely on marketing. That’s a perfect of example of marketing as attention. Those soft drinks are good products. They are designed very well. That marketing exists not to get us to try the product, but to remind us that we like it.
Finally, marketing will continue to exist simply because it works. We are not completely rational creatures and are subject to quirks in psychology that lead us to make decisions that not always in our best interest. Dan Ariely, the author of Predictably Irrational, reminds us that the little things matter , that design of the messaging can influence our purchasing designs more than the design of the product/service itself. I guess that’s what we call commercial innovation.
-Brian (Ramblings of a slightly taller man)
steven Weiss said:
Until brand and consumer commoditization is addressed,
all the rest will resolve itself. The soft drink industry has
is a pioneer. However, marketing in that business has
been commoditized and the leaders are identical
twins. “the will it sell question” asked by an
engineer without and sales background is
naive. First grade stuff.