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Tech & Digital

Introduction to the Software Industry​

The software and computer services sector spends > 11% of its net sales on research and development, which is the second-highest percentage after the pharmaceutical and biotechnology sectors.

Create intangible artifacts in the form of software applications, programs, and systems.

Key characteristics:

  • Intangible
  • Scalable and customizable
  • Low margins
  • Continuous upgrades
  • Global reach
  • Interconnected ecosystem
  • Innovation
  • Rapid iteration

Types of services:

  • Software development
  • System admin
  • Open source
  • SaaS

A business model requires:

  • a distribution strategy
    • on-premises: software is installed and run
    • cloud-based
    • hybrid
  • a source code licensing
    • proprietary (copyrighted)
    • open-source
  • a revenue stream
    • paid licenses/apps
    • in-app advertising
    • in-app purchases
    • subscription-based
    • usage-based license
    • transaction fees
  • an interaction model
    • one-to-many: like an app, photoshop, trello
    • many-to-many: like a marketplace, uber, airbnb
  • a target audience (B2B, B2C)

Key Players:

  • Developers
  • Companies
  • Users/Customers
  • Investors/VCs
  • OSS community
  • Industry Associations
  • Educational Institutions
  • Regulators/Governments

Development Methodologies:

  • Waterfall: linear and sequential approach. Requirements -> specification -> design -> implementation -> testing -> maintenance
  • Prototype: iterative approach. Build a prototype, gather feedback, refine, and repeat until the final product is developed.
  • Spiral: 4 phases (objective setting, risk assessment and reduction, development and testing, planning). Start small, and increase in each iteration.
  • Agile: iterative and incremental approach. Emphasizes flexibility, collaboration, and customer feedback. Common frameworks include Scrum and Kanban.
  • Devops: intersection of QA, development, and operations. Emphasizes automation, continuous integration, and continuous delivery.

Future Trends:

  • Low-code
  • Devops
  • Cloud computing:
    • SaaS, PaaS, IaaS, Container-As-A-Service, Functions-As-A-Service (serverless)
    • Public (GCP, AWS, Azure), Private (on-prem), Hybrid, Multi-cloud, Community Cloud (shared among organizations)
  • IoT
  • Blockchain
  • AI/GenAI
  • VR/AR

Tech Sectors:

  • Web Development
  • Mobile Development (can be cross-platform or native)
  • Enterprise software
  • Gaming/Entertainment
  • Embedded
  • AI/ML
  • Cybersecurity
  • Data Science/Big Data

Successful Product Launches:

  • User-centric/User-driven iteration
  • Innovative
  • Adaptable
  • Scalable in a sustainable way
  • Effective business model