It used to be easy to tell what was and wasn’t software. If you did it on a computer, it was software. If you sat in front of a screen with a keyboard to use it, it was software. If you manipulated data with it, it was software.
Software produced either paper or an electronic message to another machine. There were people to help when the machine broke (maybe).
That world was clear. Investors found software valuable because it could be licensed infinitely. It lived inside the computer and was repeatable. Just like music.
So, what is Amazon?
You sit in front of a machine (or, increasingly, pull the machine out of your pocket) to use it. Instead of paper, products come to your house. As a result, Borders (a chain of stores) is going out of business.
Amazon destroys friction in its supply chain while expanding it using data developed by monitoring that very system. The larger it gets, the more effective it becomes. Why? Because it is an organic self-correcting information system that integrates goods, services, customer satisfaction, data processing and the data that comes from that data processing
And then, what is software today?
No one has a good definition that helps you to understand when the process within the machine stops being software. Like Amazon, most companies are collections of systems that use people, goods, services and data. They just don’t usually act like an organic whole.
Every company that serves the Human Capital / Human Resources marketplace delivers much of its value through a terminal, laptop, mobile device or desktop. Everything save strategic consulting is delivered electronically and features information that has been processed to suit customized needs. Yet, they insist on calling themselves by old fashioned names. That is their achilles heel. That is where they limit themselves.
In fact, they are all software companies.
We’re at the edge of a great transformation. Recruiting Marketplaces (BountyJobs), Staffing Agency Replacements (ReadyForce), Contingency Labor Exchanges (eLance), RPOs (RiseSmart), Learning and Collaboration Platforms (Saba), Recognition Systems (Rideau), Job Boards (theLadders) and Talent Management Systems (Stepstone) are in the process of blurring familiar boundaries. These companies are building market expertise into their data processing systems.
Rather than trying to define themselves by old categories like software, these companies are following Amazon’s lead and packing expertise, content, and even people into their technology integrations. The question they answer is not how to automate anything. Instead, they use data to continuously perfect, optimize and streamline their deliverables.
And those deliverables are always information.
The new giants of our industry will be companies that get you the best data at the optimum moment to drive the smartest decision. That’s what Amazon does. That’s increasingly what Apple does.That’s what the companies I cited above all share in common.
They do not focus on process automation. They focus on the delivery of the best information when it’s needed. They make capital go further, whether it’s human or financial. They deliver information turbocharged systems that are self optimizing and self correcting.
The technology is leaping beyond the bounds of those 20th Century categories.