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Looking into the Future
Christof Ebert
AUG 12, 2015 13:55 PM
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Looking into the Future
by Christof Ebert
 
Where is software heading as a business? I have spoken with many software business leaders around the world. They pointed to five success factors that will advance software business. They left unaddressed whether we evolve to humanity 2.0 – or a post-human society. Read some of the results in this blog and the full article in the November issue of IEEE Software... 
 
Software makes the world go round – at ever increasing speeds. From the embedded software in automotive, avionics and automation to the ubiquitous computers in smart phones and consumer electronics, software provides features and functions in daily use. Our society depends on reliable software systems which depend on innovative companies which depend on competent software engineers. 
 
Software business is different from traditional industries. This is amplified by experts and leaders across industries. It is interesting to observe that most see the two faces of our industry, namely innovation and complexity:
  • Software attracts more investment than other industries, which is making its market valuation grow faster than any other industry, thus continuously accelerating innovation.
  • Creativity matters, whereas production and logistics are of limited relevance and incur marginal costs, which makes it easy to enter a market and sell globally.
  • Software is flexible and easy to change, which results in a high frequency of products and releases that not always create real value.
  • The overwhelming complexity of technology and products, combined with insufficient competences, severely cannibalizes the quality of software-driven products.
One impression clearly dominates. Software is changing practically all industries and it is the single major driver of innovation across all industries. Where we used to distinguish components, systems and services, we see today flexible boundaries entirely driven by business cases to determine what we best package at which level in which component, be it software or silicon. Take consumer and communication systems. A TV-set in the 1970s had no software, while today its competitive advantages are software-driven. Or take aerospace systems. While in 1960 only 8% of the functionality of the F-4 fighter aircraft was implemented in software, by 2000 80% of the F-22´s features were provided by software. Today we see an increasing amount of military aircraft entirely operating as autonomous drones without any pilots and increasingly self-controlled. 
 
Automotive industry is following the same pattern. Modern cars exhibit more than hundred embedded computers with more software than any airplane. Cars primarily sell due to their software-based functions, be it for sophisticated power train, energy efficiency and e-car, or a wealth of communication facilities for driver assistance, safety, diagnosis, etc. Autonomous driving is being introduced and is with market entries such as Google slowly moving from a mechanic business to a software business. A recent Detroit motor show featured the slogan that a car is a microprocessor with a wheel and an engine.
 
Success in software business is not granted. Products and solutions have to meet increasing quality requirements, but need also to be designed towards low cost, easily adaptable and to exploit the advantages of modern platforms. New competitors are entering markets with new solutions and without being hampered by legacy systems and traditional business models. The technology landscape has become increasingly complex.
 
In general, the interviewees revealed four key challenges and obstacles to successful software business, namely 
  • Dysfunctional organization with unclear responsibilities and silo work which results in continuously changing focus and schedules.
  • Lack of strategy and unclear strategy and roadmaps with unclear dependencies and fuzzy technical requirements and impacts. 
  • No standardized business processes across the company with a slow and cumbersome decision-making process and many individual ad-hoc agreements. 
  • Insufficient requirements which are often just collections of what had been heard at customer visits and other such events, but not mapped to value creation and business cases.
With innovation, globalization and complexity fueling software business worldwide, they also create many inherent risks which can easily endanger or kill a business. Software business, therefore, has manifold challenges. They range from the creation process and its inherent risks to direct balance sheet impacts. Software is getting more complex, more connected, and more life-critical. The sources of this complexity are hidden in the nature of software, consisting of many blocks from different vendors, along with the possibility to run the software at a hardware manufactured by different vendors. Also, software teams are often multifunctional and team members are responsible for many activities like planning, developing, and executing plans, roadmaps, and strategies – without being adequately trained. This is different in other industries where for instance production and logistics are strictly separated from development. Even inside development teams we often find that the same people that design a product or component are also those who test it. No wonder that quality is often below expectations, and specifications are overlooked. 
 
Our business climate will remain volatile. At the same time complexity and technology will grow fast. The resulting competence gap will lead to even stronger fight for skills. From the survey and interviews we can see that companies will continue to invest in growth through innovation by developing new products and solutions, because this determines their market position. They are aware of the volatile market situation and want their development teams across the world to be as lean and innovative as possible. Let us look briefly towards what will be an outlook on the next thirty years – if at all possible.
 
Virtual environments and augmented reality have set the path towards software directly creating our own reality. Many kids today cannot imagine life without software-driven games and their artificial intelligence. Game reality is seen by many as more realistic and as more appealing than our classic mankind release 1.0. Direct interaction with our nervous system will advance such virtual reality towards real reality, or humanity 2.0. Impacts on society are manifold. Think about cars and transportation, and their negative impacts on the environment. If we live in a reality where we can meet people at any place without actual traveling, pollution, waste and accidents will be things of the past. Within the next thirty years, we will have blood-cell sized devices in our bodies fighting against diseases and improving our intellectual and cognitive abilities. Our computers will successfully pass in that very timeframe the Turing test and soon after achieve the singularity. 
 
Software in the future will extend the brain the same way as it has extended our behaviors today. What used to be civilization in the classic sense of humanity will become increasingly dominated by non-biological and post-human intelligence. The Internet of today will evolve to a global network connecting billions of people to share data, information, and eventually thoughts and feelings. All this will have dramatic consequences on the way we live, behave, and evolve as humans but also as societies and as mankind. Software is in its center and we better shape today the necessary competences to do it the right way, which is more about values and soft skills than technology.
 
The software technology which we build today will fuel humanity 2.0, where we innovate processes and products, while their development, production, operation and service is increasingly done by machines. In doing so we will advance mankind – hopefully for the better. Fig. 3 illustrates the major trends but leaves one key question not answered: Will it be a humanity 2.0 with better quality of life, or will it be a post-human environment? It is up to us software engineers of today to embed software with humans or embed humans to software.
 
Contact me at christof.ebert@vector.com for more information or to discuss these trends.
 
More:
 
The full article “Looking into the Future” in IEEE Software Magazine with many concrete guidance for software practitioners will be online as of November 2015.
 
Find more thought-provoking and insightful white papers at our Vector Media Center.
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