A New Decade of Technology Innovation

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In contrast with the first five decades of the software business, technology innovation was not much of a driving force in business applications over the past decade. It's not that there weren't steady evolutionary enhancements, but these did not have a fundamental impact on demand or competitive dynamics. Instead, the lack of a major technological catalyst created the business dynamic that characterized the 2000s: vendor consolidation.

The last big schism in enterprise software took place two decades ago with the introduction of client/server computing. That term “client/server” is misleading because it wasn't just the architecture that was important in driving innovation and demand. It was wrapped up with several other threads of emerging technologies, including the mainstreaming of the relational database, event-driven programming languages, and the graphical user interface. When combined, these innovations made it far easier to create flexible business applications that could support a wider range of functions and processes. All of these elements reached the market within a couple of years of each other, so in hindsight it looks like one big event, but it was a convergence of several that made the difference.

I believe that innovation in enterprise applications in this coming decade will accelerate. This time around, in the next couple of years what might be different from the 2001-2010 timeframe is that several disparate threads arriving over a longer period of time may accelerate the obsolescence of existing business software. In-memory computing may be a game changer when combined with (for example) cloud computing, server virtualization, open source software, mobility, and tablet computing and other user interface devices that substantially enhance usability, utility, and the user experience. It's true that each of these things has been around for a while and isn't really “new.” However, as business computing has matured and become more complex, it takes longer for threads like these to coalesce into products and services that corporations will demand. If these new products prove attractive enough, they could spawn a wave of replacement of existing software.

(This is a shorter version of longer blog that you can read here.) ###

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Robert Kugel supplies the Business Finance community with reporting and commentary on the intersection of finance, software and systems.

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