Software is eating the world, and the channel

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This article appeared in the April 2015 issue of CRN magazine.

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Software is eating the world, and the channel

It’s a common conversation in the newsroom: we know readers are mad for infrastructure, while stories about software are a tougher sell.

A behind-the-scenes tour of a data centre? Yes please. But software stories rarely rank so well (InfoReady’s buyout of analytics firm Adaptic Solutions was a welcome exception).

But infrastructure – whether a pizza box server, high-tech hyperconverged kit or a Tier 3 data centre – is just a means to an end for clients. For customers, it’s all about applications. 

I recently hosted a roundtable of leading data centre service providers (see our coverage here). When asked the cloud vs on-prem question, Jacques Tesson, from sponsor DPSA, summed it up: “The choice of infrastructure, including whether to migrate, starts with the client’s applications in mind.”

Speaking to senior Telstra exec Brendan Donohoe about its cloud empire, which spans infrastructure- and software-as-a-service, he said customers were particularly interested in SaaS, and for good reason. While Telstra has sewn up an hefty list of IaaS partnerships with the likes of Cisco, IBM and VMware, all of this incredible, elastic, hosted compute power is simply a way to offer clients a choice about where to stick their applications.

Look at HP, which has just launched its Helion Code Wars, an ‘enterprise-grade hackathon’ that it hopes will attract developers to build apps for its OpenStack cloud. 

Or look at the Forbes list of the top 20 youngest billionaires, where software builders figured heavily, especially web apps and social networks. In fact, I could only count two of the young tycoons who made their money in hardware: the founders of GoPro and wireless vendor Ubiquiti Networks. 

It makes you think that the world’s wealthiest company, Apple, as predominantly a hardware manufacturer, is an anomaly. But even Apple’s greatest success was driven by software – more than anything, the App Store drove the iPhone’s early growth.

It’s no wonder that in the channel, companies are looking to software and intellectual property for their future. But let’s not ditch hardware or services yet. Heed the experiences of the vendors who lead the SaaS. As Sholto Macpherson points out, very few of these pioneers have ever turned a profit.

Steven Kiernan is the editor of CRN.

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