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The Future of the Software Industry 267

madro writes "Remember 'Does IT Matter?' a while ago? Nicholas Carr is back with an editorial in today's New York Times following Microsoft's decision to dramatically reduce its cash stash. Carr's take: Microsoft is admitting it can't find better uses for its cash, due to the growing maturation of the software industry. No mention of open source, although Apple's consumer-targeted model of free iTunes driving iPod demand is one listed alternative." Reader CodeArtisan submits another piece about Microsoft's loot distribution, and Newsforge (which is part of OSDN along with Slashdot) has a story about the future of commodity software.
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The Future of the Software Industry

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  • I'm sorry, I just don't buy that (pun intended).

    If I'm buying a nice HD based MP3 player, the last thing that will sway my decision is whether a piece of free proprietary software will work well with it.
    • by 0racle ( 667029 ) on Saturday July 24, 2004 @12:57AM (#9787174)
      And your everyone? The iTunes interface is a reason for the iPods success, perhaps not at first, but if iTunes was a pain to interface the iPod with, a lot of people, as in people who wont whip up a perl script to do it if its not what they want, would have thought twice about it. The iPod took off in part because the word of mouth about it had nothing negative to say about it.
    • And by using the word proprietary you have basically proven that you are in no way Apple's target customer.

      You have it backwards, besides. People want to make sure their MP3 player works with the software they already have.
    • > the last thing that will sway my decision is whether a piece of free proprietary software will work well with it.

      I pity you.

      You worship idol of cave* and are creating paradoxical situation whereby you are _limit your freedom of choice_ while professing _free_ software.

      * m
  • The Problem At Hand (Score:5, Interesting)

    by Effugas ( 2378 ) on Saturday July 24, 2004 @12:53AM (#9787149) Homepage
    MS's giant cash pile is too deep of a pocket for international juries and governments to ignore. The disbursement is being directly driven by the fact that the company has enough cash on hand to be able to shrug off $600M judgements.

    What, did you think the timing was accidental?

    • Nicholas Carr is just one of those guys who like to pretend they're informed and ahead of the curve when in reality they're just pulling stuff out of their ass. They throw enough shit against the wall and after awhile some of it sticks and then they say "See! I told you so!".
    • The reason they kept the cash on hand for so long was in the event of major legal awards against Microsoft. Now that the Sun and antitrust issues have been resolved for the forseeable future, they are free to release that capital for better uses, i.e. returning it to shareholders.
      • The real reason they are releasing cash has to do with something more fundimental. There are Securities Laws which while seldom enforced are called "Blue Sky Laws." These laws make it a serious criminal offense to sell a stock never intending to pay your investors back appropriately. Microsoft has earned a wad of cash. This is so obviously a stock fraud if they don't pay it in dividends especially since they cannot argue that they are going to grow infinitely any more that they must distribute or they wi

  • The dividend has nothing to do with the stock price going down because of earnings slipping [] in Q4.
  • ...that MS has all this money and yet such poor quality software. I'm not just trying to bash them, but billions of cash in reserve and yet their software is repeatedly delayed and then still buggy and full of security holes.

    The Guardian article has an interesting idea of giving some of the money back to customers as compensation for their illegal activities and general crapiness.

    I think MS needs to think about what their point is any more. Apart from making money, they're mostly just fucking up the indus
    • No. MS has this much money, in part because they make poor software. Writing better, safer code would have cost them both money and strategic advantage in the positioning and advertising of their products.
    • The Guardian has was written by a very l33t write i'm sure.
      It is no use saying that the computer industry is different and that computers are uniquely complicated things. It is Microsoft that has made them so complicated so it can create a profitable spiral of updates.
      Suddenly microsoft has overcomplicated software?

      Fourth, to redress Microsoft's smothering of competition, put 20% into a special fund to foster entrepreneurs and inventors to develop alternative products. Microsoft has made Word and Excel
  • Commoditization (Score:5, Insightful)

    by OldAndSlow ( 528779 ) on Saturday July 24, 2004 @01:00AM (#9787192)
    I don't think that what software is turning into a commodity. It think what is happening is that it is getting very hard to charge premium prices for software that implements old solutions. My customers (mostly) don't care about programming languages, OSes, or database managers. But they sure have to pay for them.
    But there is very little innovation left to be had in these basic layers, so why are we being charged thousands, and even tens of thousands, for licenses? Surely not to support R&D.
    It may well be that we are entering an era when we will see a great blossoming of innovation, if only because sole proactitioners and small teams can afford to the tools to tackle the kinds of problems that need to be solved today.
    • Exactly! (Score:5, Interesting)

      by weston ( 16146 ) <> on Saturday July 24, 2004 @01:32AM (#9787322) Homepage
      It think what is happening is that it is getting very hard to charge premium prices for software that implements old solutions.

      Precisely. I think we are indeed going to see an explosion of software, especially niche software -- and this is possible exactly because platform software is becoming commoditized.

      Nope, it's not new wisdom. It's covered by Eric Raymond in his essays and it's all over the place... but for some reason, only a few people seem to understand this.

      • I think that that the instead of homogenized solutions, we will see an explosion of cutomization as companies fisght for advantage.

        The SAP and PeopleSoft approach is a failure and there will be a huge space for using existing componentns to customize solution.
        • Shite! It's too late at night and too much Irish whiskey. My repy was fucked. Anyway, software nust be SOFT. Once the business types realize this and the fact if they can capture their business advantages in software, giving them more advantages, then they will win.

          And the true job of a true software engineer is to
          1) Capture true business advantages in software and extend them and
          2) review and refactor business proesses. True software engineering also involves work in the area of Operations Research.

  • I think that the software industry has much, much more room to mature. The current bottleneck, IMHO, is the state of consumer-grade computing hardware. While huge strides are being made almost daily, hardware still can only handle what it will handle.

    I am dreading longhorn as much as the next guy, but one thing stands out to me: Microsoft is still a major player in the computing industry, like it or not. I think they are trying to light a fire under the hardware manufacturer's asses with the recommended []
  • by Anonymous Crowhead ( 577505 ) on Saturday July 24, 2004 @01:04AM (#9787210)
    This akin to the age of enlightenment, but we aren't quite there yet. No one knows the future of IT and software. We live in interesting times. The next 5-20 years will be....interesting.
    • Especially since Moore law still seems to hold.

      At the end of last year I bought two computers, one for me and one for my father.

      These are the specs and the prices :

      1. 2 Ghz Celeron, 256 MB, 40 GB, 240EUR
      2. 2 GHz Athlon, 2 GB, 250 GB RAID, 2500EUR

      Now use Moore's law to extrapolate (I did it backwards with all the systems I ever bought and it mostly fits).

      This means that at the end of 2006 I should be able to get a system that is half the capacity of my current high-end system for 240EUR (but with 8 GHz spe

  • buying time... (Score:5, Insightful)

    by Hooya ( 518216 ) on Saturday July 24, 2004 @01:19AM (#9787267) Homepage
    ... until longhorn ships.

    you have to ask, why now? MS has been in business for such a long time (in software industry terms). MS has never been known to hand out payola. why now?

    MS has nothing else to keep the mindshare. OSS is creeping up outside the realm of just the geeks. MS has nothing effective to fend it off. except hoards of cash.

    without the payola, the stock would start on a slippery slide downwards all the while losing mindshare. and remember, mindshare among geeks is what got MS to where it is in the first place.

    all this just to buy time, literally, until longhorn ships.

    if there is any 'after burner' somewhere in the FOSS community, the time is now to kick it in. to win over mindshare before longhorn. because from now until longhorn, MS has nothing but diversionary tactics to keep people interested in MS.

    and to all MS fanboys out there, i'm not saying this is a bad thing. it's a great thing. i'm just making a guess as to why they are doing it now.

    • MS is the John Holmes of mindshare. It just doesn't get any bigger than that. Sorry dude, MS isn't going to fall over anytime soon. You're both delusional and stupid if you think they are.
      • Re:buying time... (Score:3, Interesting)

        by dmaxwell ( 43234 )
        We don't need MS to fall over. It wouldn't break my heart if they did...and I think an IBM style market beating followed by reformation is more likely in the long run.

        We just want to get enough market share that they can't push us around with polluted file formats and comm protocols. For that matter, we need enough share that buying politicians and filing frivolous patent suits would be a bad idea. SCO is a trial balloon as much as anything. Hopefully, they're getting the hint. As flaky as ESR is, his
      • It just doesn't get any bigger than that

        yes it does. The roman empire. it fell. is gone. buried beneath ten layers of dirt. why? narcissism. plain and simple. while i don't think MS is detrimentally narcissistic, it certainly is arrogant. but that's besides the point.

        now, nowhere did i say MS was going to disappear. so calling me stupid over something i never said was uncalled for.

        what i did say is that MS is starting to have to fight for *keeping* it's mindshare because they've got nothing else until l

  • by SuperBanana ( 662181 ) on Saturday July 24, 2004 @01:26AM (#9787293)

    From the Guardian article:

    Oh, and while we are at it I want a tiny payment for myself for having to pay for a second suite of Office for my own (non-Microsoft) computer even though I already had it installed on my office laptop. Or at least count it as an offset against all those statistics about counterfeit downloads.

    Maybe he should have actually read his software license, because if Office is installed on a business system, one copy is allowed to be installed on a home system for the purposes of allowing that employee to work on Office documents at home.

    Just goes to show you how incredibly ignorant some technology reporters are. Oh, and he could have downloaded StarOffice or OpenOffice...

  • by krahd ( 106540 ) on Saturday July 24, 2004 @01:31AM (#9787316) Homepage Journal
    One thing that's been increasingly bothering and intriguing me, as I get older and older (I'm 27, I'm getting middle-aged!) is what is the fscking point of having loads and loads of money (á là Mr. Gates), if you are going to die nevertheless...

    I mean, it's pretty obvious that you can only spend a finite amount of money in a finite amount of time. Period. And why do people care about the future of business dozens (even hundreds) of hears after they're gone?!?

    I've heard of some companies buying water from 3rd world's countries.... they're addressing a problem (as a company) that will arise after each-and-every employee is dead and buried...

    I am not saying is wrong (althoug I do believe it is), but I just don't get it. Our society is builded upon negating the evidence that we are all gonna die.

    So, finally, and to stay on topic, the idea of Microsoft giving back some of it's money, should not be as crazy as it sounds right now...

    • 1. Power and Celebrity

      2. People pay millions for knock-off versions of immortality. Remember the pyramids?

      3. People aren't perfectly tuned. They aproximate rationality, but don't reach it. They often over-indulge impulses that would be rational if they weren't so extreme.

      4. Plain old enjoyment. Why do artists paint, even if they could make more money and buy things they need if they did somthing else? Why do people play games instead of working? Because they enjoy it. Many people who win the lottery keep
    • So, finally, and to stay on topic, the idea of Microsoft giving back some of it's money, should not be as crazy as it sounds right now...

      I would estimate that the Emperor knows that the empire is crumbling and the buy-back is just a scam to pay out cash to insiders before the big fall, including to himself. The same is true of the SCO buy-back program.
    • To put your idea another way, companies are dedicated to one thing: the company. To the extent that they plan the future, the future is the company and nothing else. It really doesn't matter what the company does, as long as it can prosper, it can do anything. In this light, Microsoft has a failure of imagination: with all that money, Microsoft could have gotten into some very profitable businesses if it chose.

      But in a larger sense, the quarterly results fixation has an especially bad outcome: companies ti
  • Want to reduce your cash holding. How about hirng 7000 engineers [].
  • A confusing word (Score:3, Interesting)

    by latroM ( 652152 ) on Saturday July 24, 2004 @01:53AM (#9787410) Homepage Journal
    The term ``software industry'' encourages people to imagine that software is always developed by a sort of factory and then delivered to consumers. The free software community shows this is not the case. Software businesses exist, and various businesses develop free and/or non-free software, but those that develop free software are not like factories. The term ``industry'' is being used as propaganda by advocates of software patents. They call software development ``industry'' and then try to argue that this means it should be subject to patent monopolies. The European Parliament, rejecting software patents in 2003, voted to define ``industry'' as ``automated production of material goods''.
    from: SoftwareIndustry []
  • by eidechse ( 472174 ) on Saturday July 24, 2004 @02:17AM (#9787499)
    [The Scene: a writer at their desk with deadline looming:]

    Must have idea...

    Must get editorial in on time...

    Politics are done...

    Not much happening in the literature scene...

    Chomksy stuff is too complicated...

    Must be controversial...but not too controversial to the prime demographic...

    Whoa...I've got it!!!

    [writer bites tongue and begins scribbling onto a ruled notebook, we see the title:]

    "The Software Industry is Dead!"

    [writer scribbles madly for 90 minutes, has a lot of rough red wine during the scribbling, and then falls asleep on the draft (and dreams of Hemingway).

  • by benow ( 671946 ) on Saturday July 24, 2004 @02:29AM (#9787536) Homepage Journal
    I'd offer that m$ have gotten themself into a corner with their stance on DRM and backing large industry. There are not many forward-thinking ventures in this area, as most business models tend to squeeze cash from their manufactured community, having not yet figured out that a vital community is maintained through the cooperative fostering and the free involvement of free thinking individuals. A loose self interested cooperative.

    Perhaps a comparison between the bonzai and the ancient jungle. Rigid nano control versus emergent niches. A good bonzai master does not pretend to go against the nature of tree, however. It could be argued that MS is too big to be good.

    Personally, I think they should take their cash, set up a good dozen isolated coder communes and evolve a new direction for themselves, one that doesn't involve tieing up the legal system, blanket enforcement and predation. They have enough to change the rules, to shatter the 'office supply' mentality. Without a drastic shift, they're screwed (well as screwed as a giant monopoly can be). They've missed the beauty that is open source, and, as it lies, seem doomed to be tied to a life of fostering servitude. Like moss looking up at the flowering canopy.

  • Ah I get it (Score:3, Insightful)

    by junklight ( 183583 ) <mark&junklight,com> on Saturday July 24, 2004 @02:36AM (#9787564) Homepage
    All the software that was ever needed was a word processor, outlook, excel and powerpoint - a few other bits and pieces.

    I feel sorry for all those people building systems to run peoples businesses, the new phone networks, Air traffic control, software to let people access and work with their data in new and exciting ways, computer games...

    All wasting their time - all the software industry needed to do was let microsoft do its thing.
  • by mcrbids ( 148650 ) on Saturday July 24, 2004 @02:38AM (#9787566) Journal
    The software industry is maturing. It's also broadening. There are zillions of little niche markets well served by a bright high-level language programmer who's willing to listen.

    (Hint: I'm one of those listening programmers - I'd like to think I'm bright)

    Don't look at software in terms of "an industry" or as "a product". Look at it as a means to solve problems, and then work out terms where by solving problems, you get paid.

    Software isn't the point anymore. The solution to the problem is the point. Look at IBM and their services department. They don't care about the software - why else would they deprecate their zillions of dollars invested in AIX and go with free Linux?

    They sell services, and software is just the means. Why not use a community supported, free product?

    In an immature market, having the product matters. Specs like N Mhz and M superBytes are important. In a mature market, the solution to X problem matters. Who gives a rat's ass about Mhz or superBytes?

    So quit with the "software is manufactured" model of the 1980s and get on with the "software is a means to solve a problem" model of the 21st century! There's plenty of money to be made, you just have to tilt your head 45 degrees and look for the problems waiting to be solved!
  • by dekeji ( 784080 ) on Saturday July 24, 2004 @02:47AM (#9787590)
    The problem is that innovation can't be bought with money or scheduled or be driven by market forces. Innovation is a social and cultural phenomenon. It requires that an entire society values education, thinking, reflection, and analysis. Even Microsoft's cash reserves can't fix the social and cultural problems we have in the US.

    It also requires that a society frees its creative members from having to worry about whether they are going to have a job in six months--someone can't afford to spend time thinking about something that may become a big thing in 10 years if they need to help their company survive this year, every year. And, despite Microsoft's cash position, they are not a company that you can count on being secure in the long run: companies like Microsoft can fumble and face hard times.

    The best thing Microsoft has done for innovation has probably been to create a few thousand people that made enough money to leave the company and pursue their own interests without having to worry about money. But that number is far too small to make a big difference to innovation overall: innovation and breakthroughs are rare events, even among a population that is perhaps smarter than average.
  • Kudos to Microsoft (Score:3, Interesting)

    by iamacat ( 583406 ) on Saturday July 24, 2004 @02:54AM (#9787607)
    $40B is a budget for sending people to Mars, not writting a new version of Solitare. Companies should return the money not immediatelly needed to make more money to investors. Otherwise stock market is just a big casino.
  • Monopolies (Score:4, Insightful)

    by 12357bd ( 686909 ) on Saturday July 24, 2004 @03:14AM (#9787652)

    The current software situation is just the logical consequence of the actual monopolized industry state.

    Without real competence there's no way to create new profit areas. If a small firm finds a niche it will be desplaced as his size reaches a critical magnitude. Big corporations doesn't need to innovate, in fact 'innovation' is only a marketing buzzword.

    Now, the point is: Software industry is being frozen by big money corporations, but software is still a hand made creation.

    There's no way to stop people writing software, the only real possibility to limit people willingness to write software is to try to convert the process in a very difficult and technical one (ie: raising the entry level). The process is a well know one, and has been done in every mass production industry (electronics, mechanics, etc). That's why we see so much complex and difficult 'standards' (ie: SOAP, CLR) being actively pushed by big corporations.

    But no matter how hard they try, software is different from others fields, the complexity factor of software is far greater, that's why small teams and even individuals are able to create great software pieces (very much like music), that's something corporations cannot fight, and that's why things keeps changing in this field.

    Some corporations see OSS as a threat, but that's only the logical effect of the nature of software creation in a connected world, the real threat is simpler than that, the real threat is that software is writing.

  • No future (Score:3, Insightful)

    by unoengborg ( 209251 ) on Saturday July 24, 2004 @06:07AM (#9788026) Homepage
    If software patents, gets granted like they are in the US today, where every simple and obvious idea seam to be granted usually overly broad patent regardless how much prior art there is, the future of the software industry belongs to the lawyers.

    Given the amount of such bogus patents floating around I doubt that it is possible to write any software longer than 1000 lines of code without infringeing on at least one existing patents.

    Now I'm just waiting for sombody to file a patent on the procedure of filing bogus patents and licence them at slightly lower cost than it would cost to contest them in court.

  • It's a shame Microsoft won't compensate the thousands of contingent staff in a respectful manner, considering they do have so much cash... I know so many people who work hard to make that company profitable, but don't get any kinds of benifits and are forced to take 100 unpaid days off every year. It is very frustrating. You have to commit to them, but they don't have to commit to you. I see so much wealth there, but it is so unevenly distributed, just like the work loads between the full-time managers
  • I'm confused.... the article starts out with a title of "the future of the software industry" and then goes into talking about what MS is doing with their hord of cash.

    Where is the connection?

    Since the future is in open source software and its pretty much proving to be unbeatable or unbuyable by such proprietary companies as MS....then what does it matter what the future has beens, are doing today?

    The only thing I see here are probably MS employees crying about where or what MS should spend the money on,
  • I really don't see why Microsoft paid out big dividends instead of investing in R&D -- trying to create something truly monumental, something truly visionary.

    For years, we've had better and faster hardware for cheaper prices, but in the last five or seven years, it seems to me (and this is no original thought) that there have been no real exciting new applications that make use of this new hardware.

    Sure, there are games. Sure, there's exotic multimedia stuff like video editing.

    But where is the new so
  • Microsoft is admitting it can't find better uses for its cash, due to the growing maturation of the software industry.

    Maybe Microsoft's software industry is "maturing" into stagnation - centrally planned economies always have. But the rest of us, innovating around the edges, aren't held back by the deep limits of "One Microsoft Way".

I've finally learned what "upward compatible" means. It means we get to keep all our old mistakes. -- Dennie van Tassel