WITHER SOFTWARE? ARE SOFTWARE ONLY COMPANIES VIABLE?

Regardless of one’s opinion of the “Surface” one should be acknowledge some attributes of the advertising that Microsoft is deploying. For example, these ads are very broadly distributed. Additionally, they have a nearly... [ view full abstract ]

Regardless of one’s opinion of the “Surface” one should be acknowledge some attributes of the advertising that Microsoft is deploying. For example, these ads are very broadly distributed. Additionally, they have a nearly strident tone in their comparisons to Apple’s products. However, an important aspect of this advertising is likely missed by most people. That is, even though the capabilities of the “Surface” are often the result of software, it is a device – and therefore, hardware.
The reason that one should take notice of the fact that the “Surface” is a device is because Microsoft may have been the only viable “general software” company in history. Until recently it did not sell hardware products or devices. While the company never embraced a broad availability of their software products across platforms (which is likely due to the fact that they were competing with these platforms), it was the largest and most successful company that provided software only.
This is important for two reasons. The first of these is the impact on the longstanding discussions of how to “monetize” technology. In effect, what if “software”, while important, can no longer be “monetized”, at least in the way Microsoft had succeeded. This raises further questions about how technology markets have changed, and about the nature of software? The second reason this is important is the very simple question of how do we think about software. While it is obvious it is not a set of features for hardware, what is it? Once again further issues are raised. For example, how should software be supported in product development, and how should it be treated when providing education and training?
For this paper a simple taxonomy of technology companies will be examined. The companies considered will be derived from Fortune, Forbes and NASDAQ. The first step will be a simple classification on a 2X2 matrix with software on one access and hardware on the other access. For companies that are largely software companies a further taxonomy will be prepared based on the kind or kinds of software that provide their revenues.
The outcome will be a demonstration of if either “software only” or “hardware only” products are succeeding in the marketplace. Additionally, an initial indication of how software and hardware are combined in current markets will result. The importance of this is to begin the examination of the viability of “software only” companies, and many of the issues that follow from that question. This paper is meant to be a beginning.