
Marc Andreessen on Why Software is Eating the World - tewks
http://online.wsj.com/article/SB10001424053111903480904576512250915629460.html
======
gacba
You can pick at Marc's words as much as you like, but having heard his visions
back in '95 when Netscape was big, he's a big picture guy and is seeing the
forest for the trees.

Consider the following:

\- In this decade and the last, software engineer consistently ranks in the
top ten best jobs

\- During the financial crash, software engineers enjoyed the least turmoil
and the quickest recovery compared to almost all other sectors

\- Software is mission critical to almost every business in the world now,
regardless of sector

\- Our jobs tend to have the highest pay among the majority of jobs (again,
top ten)

I'm with Marc. I'll double down on software right now...it's not going away.

~~~
jorangreef
The argument of "mission critical" was once given for trains and planes and
each had their bubble.

It was clear that the technology itself would succeed. This was the "core of
truth" at the heart of each bubble.

The mistake was taking this to mean that one should invest in businesses
pursuing those technologies.

In fact, the thing to do would have been to supply those industries, see
general stores and the gold rush.

~~~
jorangreef
In other words, anyone can see that software is a winner.

What's not easy, and perhaps harder now than for other industries (with less
spotlight on them), is to predict who the winners will be, and when they will
win.

------
pg
This is actually one of the things we consciously look for: companies that are
turning businesses that didn't use to be software businesses into software
businesses.

~~~
patio11
A funny anecdote from a customer of mine, make of it what you will:

They're in an absurdly low-tech niche. I'm going to call it gardening. Their
business model since the dawn of time has been "You call us up, we send a van
of guys to your house, they uses _scissors_ to trim your bushes."

Five years ago they got a brochureware website, but they were still doing
everything the same way: phone, van, guys, scissors.

Then came Groupon, of all things. See, their number one problem was getting
more bushes to trim. Groupon solved that very efficiently, but now they had a
different problem: paper no longer scaled sufficiently to schedule everybody.
So they started tracking their phoned-in appointments in (I think) Google
Calendar.

This pretty much opened the floodgates. They now use one of the help desk
SaaSes because the email volume was getting too big and the business owner and
office manager were having communication issues. Both of them bought iPhones
so that they could run the business from the road, because the owner of a
small gardening firm still needs to use scissors on occasion. They bought
Appointment Reminder to free the office manager from X00 phone calls per
month, so she can spend the time taking bookings and managing their (packed-
to-capacity-and-beyond) schedule again. Things are booming.

They're now a software, van, guys, scissors business... and the owner is a wee
bit weirded out by it.

~~~
felipemnoa
How are they a software business? They are not developing software just
consuming it. Is not much different than using a cellphone. You wouldn't call
them a technology company because of that.

~~~
mapgrep
They are clearly on the track to developing their own software; if they don't,
a similar business in the same situation will.

How long before they want to book orders via website? Unless there is an
OpenTable for gardeners I am unaware of, that will require some custom code.

How long before they want to join their calendar and help desk software? How
long before they want email logs integrated into the help desk? Those are
custom software opportunities.

One of the most interesting things happening in software right now is how easy
it has become to write just a little bit of it. The idea of a gardener
developing, or directing the development of, custom code would have been
laughable 20 years ago. With PHP and MySQL and ubiquitous cheap web/app hosts
and proliferating web APIs, it's become increasingly common.

------
mathattack
As they say in the financial world, "He's talking his book."

That said, much of what he says is spot on. Software is creeping into
everything. Education seems obvious. Health Care will be more difficult. A lot
of the change will happen in the US.

If we can't invest money, we still can invest our careers.

~~~
wallflower
> Health Care will be more difficult

To implement Health Care is an immense systems integration problem.

Having done some system integration work on a much smaller scale, it seems to
me that in the US, more universal health care is an effective subsidy of IT
for years. I think we can't really expect a working universal health care
system for years.

Using Britain as a possible analogy, building the actual master universal
health care system to handle billing and invoices and patient care will be a
technical and political challenge that will suck resources from patient care
to IT [1].

Integration is a difficult problem and with 452 HMOs in the US - even though
some will be inevitably consolidated - there will be plenty of IT work [2].

[1]
[http://en.wikipedia.org/wiki/National_Health_Service_(Englan...](http://en.wikipedia.org/wiki/National_Health_Service_\(England\))

<http://en.wikipedia.org/wiki/NHS_Connecting_for_Health>

[http://www.dh.gov.uk/en/Publicationsandstatistics/Publicatio...](http://www.dh.gov.uk/en/Publicationsandstatistics/Publications/PublicationsPolicyAndGuidance/DH_111591)

[2]
[http://www.statehealthfacts.org/profileind.jsp?ind=347&c...](http://www.statehealthfacts.org/profileind.jsp?ind=347&cat=7&rgn=1)

~~~
idiopathic
Sorry to "talk my book" as well - our start-up provides a personal health
records system that is connecting the UK's providers where the government's
master system approach has failed - but investing in IT does not suck
resources from patient care, it frees them up. I noticed this as a physician
having to walk around the hospital to deliver pieces of paper. So I wrote
software for Palm Pilots with a peer-to-peer encrypted handover system, gave
it away, and convinced each of my colleagues to buy a Palm themselves. Each of
instantly saved time they could spend on patient care, and the quality and
accuracy of our handovers increased.

The problem of health care integration is not just solvable, it is already
being solved (we are playing our part) but many in the mainstream are still
expecting a big system approach and thus missing the small pieces, loosely
joined approach that allowed the internet to scale.

~~~
robryan
I think he means suck resources more in a financial way, the money to build a
big all encompassing system will have to come from somewhere and it will
result in less money for patient care in the short term. Of course if the
system was actually built and working it would then free up resources.

------
wccrawford
"And, perhaps most telling, you can't have a bubble when people are constantly
screaming "Bubble!""

Oh, I bet you can.

~~~
ojbyrne
The housing bubble seems to be a pretty good counterexample. Plenty of people
were saying that it was a bubble, while others were furiously flipping
properties.

~~~
pyre
Exactly. It's just like the interviews with some of Bernie Madoff's clients.
They knew that he had to be doing something not quite legit to be getting the
returns that he was getting, but they all figured that they could make some
money off of it.

Everyone sees a chance to make some money and convinces themselves that they
will get out before the crash so that they won't be the last one holding the
bag.

The smart ones realize that it's a bubble, and the dumb ones don't. It's just
that the people that know it's a bubble convince themselves that that
knowledge shields them from getting burned because they know more than the
other guy.

------
snowwindwaves
"Companies in every industry need to assume that a software revolution is
coming."

I can't wait for the revolution to come to the control and automation
industry. I can see the heritage and legacy of the (software) tools I have to
use, and unfortunately they aren't so old as to have a unix heritage but to
have been born in the windows 95 era.

Probably I just need to pony up and get the real good high end shit, but the
automation industry is ripe for disruption like health care too. the problem
is the market is small and the stakes are high, so we end with old, expensive,
tried, true, ancient solutions.

/rant

~~~
nas
I hear ya. I think people have the idea that automation and controls are high
tech. In reality, most of the stuff I've seen is more like 1970s state-of-the-
art.

------
dkrich
While I don't really agree with Marc's take on what's going on with current
tech valuations, he hit on one extremely important point, and about it he is
spot-on.

There is a major crisis coming in this country if the gap in skills and
quality education continues to widen. Too many manufacturing jobs are moving
overseas while high-tech jobs are expanding at unforeseen rates. I worry a lot
about what's going to happen, and as controversial as it may sound, I think we
may see a day in the not-too-distant future where the minimum wage is done
away with.

As for Marc's commentary, it seems to me that every significant example he
cited was related to content disruption (communications, entertainment, etc.).
So I think a more accurate theme would have been "Why Software is Eating the
Entertainment Industry."

------
quanticle
>And, perhaps most telling, you can't have a bubble when people are constantly
screaming "Bubble!"

Not true. People were conscious, as early as 1997 that the dot-com bubble was
just that. It didn't stop an unsustainable rise in valuations.

~~~
rickmb
Even more so, it was pretty much common knowledge at the time. It was just
that there was lots of money to be made, and people always want to believe
they won't be the ones to lose out in the pyramid scheme.

Sure, the speed and the impact of the bubble bursting was a bit of a shock,
but the bubble itself was pretty obvious.

------
NHQ
The cat is out of the bag! What the technologists have known all along! The
market is huge, and mushrooming. Only the largest tech companies can keep pace
with the growth, and there is still a-plenty for today's startups. Get yours
today. Seriously!

Even already-connected markets, like the USA and Europe, will mature
impressively as more people get better at using an improving internet. And by
the time the entire living world is connected, birth rates alone will sustain
satisfiable market growth.

How's that for a pitch?

------
Joeri
It's not just about who will build the software, it's about who will use the
software.

The way I see it, we're on the edge of going post-material. The trend is that
the proportion of the population involved in the manufacture and distribution
of physical goods is dropping. Follow that trend for a century, and you get a
society where most people's jobs involve only virtual goods (although many of
those goods will be turned physical by 3d printers or large bespoke
manufacturing companies). Apple and google are the vanguard of the all-digital
companies (apple isn't in the business of making stuff, only designing it).
This means the majority of people will be making their money producing digital
content, and spending it purchasing digital content. Already a sizeable
portion of our income is spent on content (tv, dvd, games, books, magazines,
...). I see no reason why that trend shouldn't continue until we have a
digital post-material economy.

And if we will have a digital economy, that means most people will be software
users, producing content for others to buy. We're not just going to have to
train the people that will make the software, but also the people that will
use the software. I think the actual production of software will remain a
small share of the economy.

------
jorangreef
Analogies limp:

A few centuries ago, someone may well have remarked that many of the best
businesses in many industries, were moving into office buildings, an invention
that was only a few decades old at the time, and that office buildings were
eating the world.

1\. They would have been right.

2\. Moving into an office building would mean that a business was keeping up,
not that it was necessarily a good business with respect to other businesses.

3\. It would have been a good time to be building office buildings.

------
Sniffnoy
> Today's leading real-world retailer, Wal-Mart, uses software to power its
> logistics and distribution capabilities, which it has used to crush its
> competition.

Wait... others _don't_?

> Likewise for FedEx, which is best thought of as a software network that
> happens to have trucks, planes and distribution hubs attached.

Again... do their competitors really not? How can they get anything done?

~~~
muzz
He uses many examples to illustrate (belabor?) the simple point that
businesses leverage technology for productivity gains. This has always been
true.

25 years ago i.e. a _quarter century_ similar points could have been made--
writers/authors/journalists are now using word processors instead of
typewriters, accountants are now using spreadsheets instead of written
ledgers, grocery stores now have automated UPC scanners instead of relying on
cashiers to read price stickers, etc.

------
garrison
> The days when a car aficionado could repair his or her own car are long
> past, due primarily to the high software content.

More likely, it's because all said software is proprietary. If people got the
source code to their cars' computers, you'd see a lot more people repairing
their cars (and a lot more interest in automobiles in the current generation,
leading to real, open innovation in the space).

It's interesting to consider how cars went from being something anybody could
hack on, to something that only a few "qualified" people are now able to
service. I don't expect the same thing will happen with software (in other
words, I don't think "trusted computing" will ever become the norm), but we
must be sure that it never does if we want innovation to continue in the
software space.

------
DanielBMarkham
And herein lies the problem with patent reform.

The patent system is horribly broken, no doubt. But now that everything -- and
I mean everything -- is turning into software, what does that mean for
patents?

The capitalist answer is that we should let ideas freely grow and fight each
other in the marketplace, but _having_ an idea and _selling_ an idea are two
completely different skills. We will reward the salespeople, marketers, and
business creators at the expense of the ideas people.

Perhaps that is what we want. Perhaps all ideas, not just startup business
ideas, will become worthless. Execution will be the only thing that matters.
If so, that's going to have some major impacts in the rest of society. It'll
be interesting to watch this play out.

~~~
igorhvr
You are assuming that the patent system as it stands rewards people who have
ideas (more than the alternative of having no patents at all would).

I think there is a good chance that this is not true at all.

Some possibilities:

Maybe the system rewards people with the best lawyers? Perhaps the system
rewards people who are more worried at shooting the other runners instead of
running as fast as he possibly can? It could also be that it rewards large
companies (since worrying about patents is mostly outside the radar of small
companies), making good people want to join them?

Ideas will not ever become worthless, if only because often it takes a certain
mindset to extract value out of them.

~~~
DanielBMarkham
_You are assuming that the patent system as it stands rewards people who have
ideas_

Sorry, I should have been clearer: I am describing the _purpose_ of the patent
system, not the current application of the patent system. As I said, the
actual application of the patent system is horribly broken. My question was
whether or not the underlying assumptions that created the patent system in
the first place will still be valid or not once everything becomes bits.

------
hello_moto
As someone who has been involved in software for a long time (since I was a
kid), of course I love to read news like this.

Having said that, I noticed that in almost all Hollywood futuristic-theme
movies, software (or any ground-breaking inventions that usually found with
the help more advanced software/hardware) tend to cause problems that forces
humans to destroy them and put humans back to the world pre-software.

I hope that would never happen but looking at the trend that whatever
Hollywood producers imagine usually come true (even though it may take 5-10
years since the movie is out) in real life makes me scared sometime when I
read news like this.

~~~
pyre
Hollywood (media in general) can create self-fulfilling prophesies, but that
doesn't necessarily mean things are set in stone:

1) Where is my flying car? Where is my personal jet pack? Where is my faster
than light travel? Where is my single world government? What about space
elevators? Why are we still eating food and not geometric shapes in
primary/secondary colors (ala Star Trek's 'food cubes')?

2) People try to emulate the cool things that they see movies and read in
books. Creating software that takes us to a post-apocalyptic world isn't
'cool.' People want to create light sabers, phasers, and/or transporters.
People don't want to create master control programs that will manage the
population.

3) There are many more things to be afraid of. We have nuclear arsenals that
can wipe all of humanity off the face of the planet. We are so dependent on
industrialized agriculture and mechanized supply lines, that we would be
totally and royally screwed were they to be disrupted for a significant amount
of time (e.g. a super-volcano goes off and we can no longer use most of a
continent for farming).

~~~
hello_moto
No it does not mean things are set in stone.

Personal jet pack is here albeit still in its infancy. I'm quite sure people
are researching into ways to make car flies. I don't think you can have time-
travel (hence no faster-than-light-travel either). Of course there are
"impossible" Hollywood tricks and of course some of the things would take
longer to be created.

Sometime people invent something for a specific goal but ended up as something
else. Nobody plans to create post-apocalyptic world. But if the invention
evolves or ended up as a base to create something else, who knows what it'll
turn out to be?

Take plastic as an example of that.

Yes, I do aware of the other things to be afraid of.

------
gills
This seems inevitable, and positive. There are some friends of mine who
dislike the resulting job shedding and concentration of wealth; I am not quite
sure how that will shake out.

It will be interesting to see if today's 'software' disruptors will themselves
disrupted by software. Today's revolution seems to me, a changing of the guard
from the massive inefficient people-driven gatekeeper to the massive and lean
software-driven gatekeeper. I wonder if the evolution of this will lead to
decentralization and eventual diminution of today's usurpers?

~~~
pyre
If things did lead to decentralization, I would celebrate such a thing. In
general, decentralization wouldn't necessarily be the death of the software
industry, just of centralized gatekeepers in specific areas. Things like Big
Data(tm) (gathering and analysis) would be hard to decentralize.

~~~
jorangreef
Big data is exactly the kind of thing to decentralize: see p2p.

~~~
pyre
Someone has to gather all of the data into one place and crunch numbers on it
to make it useful.

------
rbreve
In music its all software now, mixers, sequencers, synths are all software
based. Djs use software like tracktor or serato to mix their mp3s.

------
smackay
An interesting article, however the trend described might be a superficial
one. Replace "software" with "paper" and the same arguments could be made for
the economy 100 years or more ago. That indicates that the real driving force
is something more fundamental (productivity is mentioned several times here)
that could result in software being replaced with something better.

~~~
eliben
I've heard this argument before, but I'm not convinced by it. There's a vast
difference between paper and software. Paper is bounded - it's just paper. Yes
you use it to organize matters more efficiently (although the Babylonians were
just fine - thank you - using their stone plates 4000 years ago), but there it
ends.

Software's biggest difference from _everything_ else is its being fully meta.
It keeps growing. Abstractions keeps being added. Compare software in the 60s
and today - some of us earn our bread by writing code for tools that other
people use to create other tools, that IT companies use to provide computing
to traditional businesses. And another level of abstraction isn't far away -
when it's needed, it can be added.

I don't know of any field of human knowledge similar to this aspect, which is
why software is here to stay.

Asimov had this story about all jobs being pre-assigned according to genetic
abilities. Just one job wasn't pre-assigned, and that was allocating and
assigning jobs (I may be badly mis-remembering... sorry...). Software is this
job.

------
Adkron
It is amazing to see how far we have come. I'm so glad that I picked the right
industry to get into. The world changed all around us, and we were a part of
it.

My only fear is that this will flood the market with crapy developers. That is
how this change WILL be like the DOT COM boom.

~~~
wccrawford
I'm going to assume you don't do hiring at your company, then. Because the
market is already flooded with crappy developers. The resumes that come in are
often amazingly bad. Of those that pass that check, most of them can't even
talk the talk. And fewer still can actually code anything worthwhile.

------
georgemcbay
"We believe that many of the prominent new Internet companies are building
real, high-growth, high-margin, highly defensible businesses."

What about profit? Doesn't ignoring profit (the article only mentions it in
the context of Apple despite name dropping some other wildly unprofitable
businesses) sort of suggest that maybe we are in fact making at least some of
the same mistakes as the last bubble?

"Today's largest video service by number of subscribers is a software company:
Netflix"

Netflix certainly uses a lot of software, but I think it is slightly
disingenuous to paint them as a software company.

~~~
alextp
The "high margin" part of the quoted sentence accounts for profit (after all
margin is revenue - cost, roughly).

------
gabaix
Something I noticed: he did not use Facebook as an example, while talking
about Google, Linkedin, Zynga, Apple, Amazon.

Is there a reason?

~~~
dkrich
He mentioned it in the beginning with Twitter and Foursquare.

------
7952
Technology is just mimicking the rest of the economy in developed countries by
moving to selling services rather than selling stuff.

------
known
Politicians support software only if it furthers the interests of others to
ultimately serve their own self-interest.

------
ristretto
Add to these the recent announcement of Foxconn to install 1000000 robots. Now
software will even be eating up sweatshops. Unfortunately, the rest of the
economy is slow to catch up with these changes, in both the developing and (in
a smaller degree) in the developed world. For the developing world this means
a slump in growth until a more educated generation grows up, for the developed
world, it means slow job creation. It's not a fault of technology; governments
should have seen this coming decades ago. It's a shame that still, in many
countries, programming is not required in primary or secondary education.

Take a moment to brag and enjoy the glory. Marc is a hero and this is an
inspiring piece. Now back to work...

------
NY_Entrepreneur
He omitted a bigger, more central point:

The main drive in the economy is more productivity; the main approach there is
more automation; the main approach there is computer hardware driven by
software.

Next, the main point about software is that it be 'smart' enough to give
especially valuable output. For that the main tool is math.

------
metrobius
Well i guess this means that emotionally warped hypergeeks will truly inherit
the Means of Production and run your life like a program---from cradle to
grave. Fuck Marx and Engels, we have Andreesseeeeen and Zuckerberg.

~~~
vynch
yes...we emotionally warped hypergeeks have something tht we can offer
people....their own time...while the others seem to be making money through
bullshit sales pitches!!

