a blog about innovation and solutions
opinions

Why is 2013 a good year for software?

In 2013 the software industry is growing by 6%, almost twice as much as in 2012. Beyond this, we are going to witness a turning point in the digital era.

2013. A better year?
A potential military conflict in the South-East of Asia between China and Japan, the escalation of tensions from the Middle East caused by the Iranian nuclear programme, the demise of the Euro zone or the incapacity of the Washington administration to redress the deficit are just a few valid reasons for which the triskaidekafobia (fear of the number 13) would cast a shadow on the opportunities which could make 2013 a better year, at least from a technological point of view.

2013

The year 2013 will be marked by a key moment for technology, in general, and for the software industry in particular – namely the internet is becoming mobile. Beyond this, with Google’s help, the phrase wearable computing acquires a new dimension, and the internet of things (or the thingternet) is credited for an attempt, successful this time, to have an impact at global level.

A new benchmark in the digital era: the internet becomes mobile

Communication technology has gone through a few key moments. Starting with the postal service, continuing with the telegraph, then the phone and recently the internet, humanity witnessed small industrial revolutions with every leap from the series above. In 2002 the number of mobile phone exceeded the number of land line phones, and thus instead of phoning locations we are now contacting people, depriving the new generation of the experience of phoning the house of their latest crush and of having to talk to the suspicious father.

In 2013, 44 years after the launch of the forefather ARPANET, the internet becomes mobile. According to estimations published in a study carried out by Morgan Stanley (an investment banking company) the number of mobile devices with internet access (mobile phone and tablets will exceed the number of PC. Same study states that, by 2016, the ratio will be of almost 2:1, marking in the process the moment when the majority of the population connected to the internet will be mobile (at this time the ration between mobile device and individual is not 1:1 yet).

But what does this mean for the business environment? Surely the repercussions have a major impact across the entire spectrum. Firstly, the companies that concentrated their offer around the potential for dominance of mobile devices will stand to gain. Apple is leading the group, orchestrating a strategy that has brought profits globalizing about 75% of the entire profit of the mobile phone industry, despite a market share of less than 10%.

On the other side of the barricade is Microsoft, Dell, HP (owed to the success based on the PC market, which is now declining), Nokia, RIM (owing to the slow migration towards smart phones), Sony and Nintendo (owed to the move of the gaming experience from consoles to smartphones).

For the vast majority of companies in the field of technology, the decision to adopt a mobile-first strategy is still debatable. I have recently had a debate with one of the most important tour-operators from Europe on this topics and, paradoxically, even though people are aware and know the phenomenon, the lack of vision and the preconceptions regarding the behavior of the mobile internet consumer determine a slow reaction in changing the strategy of addressing the market.

In the field of ISV companies the activity is more ablaze than ever. The companies understand that a mobile dimension of the products they are offering may ensure their success for the coming years. The approach is one that complements the functionalities offered by existing products (on-premises or SaaS) or that launches products dedicated exclusively to mobile scenarios. In the health industry we are likely to encounter applications that will help patients follow the correct treatment; the municipalities will be able to interact easier with the citizens (at reduced costs), and the banks will have a new opportunity of presenting a friendlier face to their customers.

However, as usual, Europe will follow with some delay the path of the US, where companies based on products that use the mobile internet tendency have accessed investments of 3.9 billion USD in the first half of 2012, about 46% of the overall invested capital, a spectacular increase from only 17% in 2011.

In what concerns the ISV companies…
According to Truffle – European investment company that ranks and analyses the top 100 European software companies – the major tendencies for 2013 are still cloud computing, mobile applications and adaptation to the evolution of web technologies (where standardization and increased adoption of the JavaScript programming language are determining major changes). In 2013, Yonder will be focusing its research efforts in these directions, adding as well the family of big data technologies, because of the yet unexplored potential of the issues dealing with speed, volume and increased variety of data from various industries, from health to HORECA.

Conclusions
The IT services and software industry will grow on a global level in 2013: the consumption of software by 6% (almost double as compared to 2012) and, even if not as spectacular, IT services will increase as well with about 3%. A direct consequence of the fact that the internet becomes mobile, the income from mobile applications will increase by over 50% annually, until 2016, according to Juniper Research. Furthermore, Gartner estimates that in 2013 over 80 billion mobile applications will be downloaded, almost double in comparison to 2012.

Without any doubt, mobile internet will be at the core of growth strategies for many companies. However, experience teaches us that sometimes even the most obvious moves may take quite a few good years until they penetrate the market. Thus, the web interfaces, SOA (Service Oriented Architecture) and SaaS (Software as a Service) would not be yet a topic for discussion in the architecture meetings and the board meetings of thousands of companies world-wide. At the end of the day, it is all about vision and risk taking, qualities which are reserved, most of the times, for leaders. It is up to every individual to decide on which side of the river s/he wants to be.

Leave a Reply