Readings on Software Industry structure and economics

A collection of readings on software industry structure and economics. The common themes to me are that there is a still a lot of confusion and uncertainty about the way the industry works and will evolve, and there are still a lot of changes taking place in the industry, all of which means it is a great time for innovators and risk takers.

* As Olivier Travers and Anil Dash point out, Outlook has become a platform — though not as Microsoft expected — people aren’t building workflow apps using the built-in forms and programming language, rather they are doing simple integration with the UI, targetting the huge installed base. APIs don’t make a platform — installed base makes a platform.
* Two pretty smart guys, David Stutz and Ray Ozzie, are discussing the rise and fall of platforms. Some gems in here —
I would assert that every “pure software” company that has had large-scale success first offered their customers enhanced productivity in the form of packaged proprietary software, followed later by a redefinition of that software as a platform to be used by customers for rapid customization and their extensibility needs.
and New platform efforts that set out to be highly modular or deeply object-oriented from day one are doomed to fail, because they are recognized as being vulnerable to cloning by potential ecosystem members and are consequently not adopted because of their lack of business potential. Truly useful standards always come after the fact, and often without a formal standardization process. Successful platforms ossify, leaving standardized patterns of information in their wake.
* David and Ray referred to Clayton Christensen, whose latest talk was reported on by Phil Windley. Interesting counsel for startups.
* Over at marginal revolution, the double monopoly problem — perhaps we are better off with Microsoft bundling the browser in the OS — it certainly has helped created (or at least not hindered) the opportunity for the current toolbar wars, search engine wars, rss reader wars.
* Additional open source encroachment — now routers have an open source alternative, just as clients, servers, apps, and devices have alternatives.
* Offshoring and globalization observations from Ray Lane via Phil Windley No matter what your politics are, you have to decide where you stand on free markets and globalization. India and China have focused on Math and Science over the last 25 years and we can either use them of someone else will. If we don’t, we’ll be France.
* I need to read Ross Mayfield’s post on power laws and private equity about 5 more times. I think it is saying something fundamental about the nature of private equity investing but there are so many ideas in this article that I can’t come to a clear conclusion — fatter tails, greater interdependence, faster shifts, greater exploration of alternatives — there is a lot of stuff in this article.