One of the unsung facets of working reasonably up in the org structure of a large, successful tech company is that you get a unique view of how the tech media machine works.

Tech writing (like Tech Marketing) is hard, because 1) Any sufficiently advanced technology is indistinguishable from magic, 2) Only magicians really understand the magic, and 3) Magic skill != writing skill. So, back in those ol' days, I wasn't that surprised to find that media pieces often originated in the Marketing departments of big companies, but I am always surprised when media outlets appear to run the Marketing feed unedited.

As a sign that some of the old ways still prevail, today we have the following two, loosely-coupled headlines: Vista success hinges on developers and Developers take advantage of Vista. A nice two-headline tautology.

I'm sure both headlines are valid, but looking at things that shallowly completely misses what's going on in software right now. OEM Agreements guarantee Vista's success - things might be better if developers come aboard, but Vista should do just fine (on every new machine shipped) even if they don't.

This was probably true even back in 2001, when Microsoft CEO Steve Ballmer famously cried "Developers! Developers! Developers!", but it really doesn't bear up to scrutiny today. In 20-odd years of mass-market windowed software development, Zawinski's Law ("Every program attempts to expand until it can read mail. Those programs which cannot so expand are replaced by ones which can.") - has basically held, and now even the simplest "mainstream" apps offer a staggering amount of functionality.

In the desktop software world, probably 95% of all usage is performed using about a half-dozen applications (Word, Excel, PowerPoint, Outlook, Browser, Itunes, IM Client). Even if all the developers stay home, that still means that Vista will lose functionality only at the remaining 5% margin.

There are two things worth drawing from the articles: 1) We'll see better software on the Vista platform if developers flock to Vista, but Vista's success does not depend on that flocking, and 2) if you are writing software today you have to be mindful that most (95%, if you accept the guesstimated figure above) of the "horizontal software space" is already filled.

That's not to say that there's not room for great new software, only that great new software isn't going to take a piece of the current pie—the only way to create great new software is to make the pie bigger.

In a later post, I'll talk about models for doing just that.

"Life must be understood backward. But...it must be lived forward." Kierkegaard

Credit Bill Gates and Microsoft with being the first to realize that there was a mass market for software "on every desk and in every home." Software Economics 1.0 said 1) software had high fixed costs of development, 2) software had essentially zero marginal costs of delivery, and thus 3) the first to mass scale would rule all, and throw off incredible free cash flow in doing so.

Software 1.0 was sold by license, delivered on media, where new license sales are good, ongoing support revenue is ok (a necessary evil), and addition services (given that they deliver lower margins than license sales) are bad.

This model drove Microsoft (and to a lesser extent Oracle, SAP and other giants, who were more willing to flirt with independent P/L services businesses, for themselves or their partners). Microsoft still operates essentially this way (waiting for that Vista upgrade license revenue stream) today.

Still, software had no sooner left the garage than two giant holes began to appear in the model. Firstly, upgrading software is painful, and the incentives for the buyer to take and install software shrink as the software grows to meet the business need. Given that Windows XP is pretty good, will businesses really want to absorb the deployment/support costs to adopt Vista?

The second problem with the Software 1.0 model is that fixed costs become so dominant that only the leading players can stay in the game. Prior to all the acquisitions (PeopleSoft/JD Edwards, Siebel, etc.), Oracle needed to maintain a staff of 5,000+ application programmers, not to chase down SAP, but merely to stay credible the applications software business.

Leave it to the Children of the Corn to find a new way...

A number of commenters have speculated about what Microsoft would create after Vista - with the idea being that the market has moved beyond large, monolithic systems deliveries. Google, and specifically Google Labs, is the new delivery model, and in the next couple of posts I'm going to speculate on how the industry evolved to this point, and what it implies for software delivery going forward.

I was a VP at Oracle at one of the specific points when the industry turned, and there are a lot of interesting things to draw from the evolution, and Larry Ellison's (among others) vision for the future. Larry has (cultivates, maybe) an image as a maverick at least, maybe even a crazy man, but in the evolution of software he's been crazy like a fox, and his vision has been spot-on. Next up: The Year Zero: 1994-1995.