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Services are feeding the world

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Some three years ago, Internet guru Marc Andreessen published an opinion piece in the Wall Street Journal arguing that software was eating the world. Many of the biggest companies had turned into software companies, he said. But I think it goes one step further: all companies are gradually turning into service providers. At some point in time, we will no longer be buying products, all we will be buying, will be services.

At the time Andreessen’s article was published, there was some doubt on whether Internet companies like Facebook or Twitter were overvalued, and Andreessen came to their defense by talking about the value of software, as intangible as that value may be. He picked some nice examples, like Apple, that had turned into a software company thanks to iTunes, or Netflix, which, to him, is nothing less than a software company.

That phenomenon is being repeated right cross the IT industry: many companies are focusing increasingly on software, EMC being no exception. Datacenters have long been seen as basically a large collection of hardware but, nowadays, we talk about the ‘software-defined datacenter’, as software has become the main element in a datacenter, automating and orchestrating anything that needs to happen in a datacenter. Everything is becoming software-defined: software-defined storage, software-defined networking,… As VMware CEO Pat Gelsinger recently said: software is eating the datacenter.

Yet software is only scratching the surface, the key proposition here is that everything is turning into services. iTunes is not merely software, it’s a music service. Netflix is not about the software, it’s about the video service they are offering. Spotify is all about software, but the end game is offering music streaming services. And, again, all of this is not so new. Just take the example of a car. You probably have a rental contract for the car you are driving. This is not a product you are buying, it’s a ‘mobility service’. The specific car may be of emotional value to you (as any fleet manager inside a company will testify), but the real value lies in the mobility service: if you have a flat tire or crash your car, a new vehicle will be delivered to you in no time, and you can resume the mobility service. Even a hardware giant such as General Electric is now offering its products as a service. As you may know, General Electric has invested USD 100 million in EMC’s analytics specialist Pivotal, because they believe capturing data from connected devices will enable them to become more efficient and more effective. Putting sensors in every device they produce will enable them to shift from a product-centered strategy to a services-led strategy, no longer selling jet engines or washing machines, but actually offering these products as services to their customers.

With the software-defined datacenter, the same applies: software is a crucial element as an enabler for IT-as-a-Service. The delivery model of IT has shifted over the years, and has finally turned into a services model, offering on-demand capabilities. Access to IT is becoming ubiquitous, and the software a company chooses will help differentiate the services it can offer its customers. Software is indeed eating the world, and eating the datacenter too, but services are definitely feeding the world.

Arnaud Bacros, Country Manager of EMC Belux. Read his blogs on www.floor161.com, or follow Arnaud on twitter: @ArnaudBacros.

 

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