Category: Articles

The Hardware to Software Technology Shift

When the iPhone hit the market five years ago one of the major shifts in mobile phones evolution took place: the shift from hardware to software. The iPhone was a software platform. Companies like Nokia, RIM and many other ruled in the hardware era of the mobile industry but with the shift to software companies like Apple and Google became the leaders leaving Nokia and RIM fighting for their existence. This shift is not unique to mobile phones. We will see more industries get disrupted because of the hardware becomes commoditized and the software takes over the innovation.

Computers also went though this shift. The first signs of the shift was with Windows 95, the first operating system for the consumer. It was a huge improvement in the evolution of operating systems, and opened the world of computers and the internet to the masses. Still, computing was some work. The final shift was with the tablet when the software became the key element with the multi-touch. Even the notion of a disk drive is gone. People that use tablet don’t even think they are using a computer.

We usually regard products as hardware because we can see them and touch them. And products such as computer, tablets and smartphones are all about hardware. That won’t change. The change is that the dominant innovation is software. The hardware becomes a sustaining innovation while the software creates the growth innovation. The iPhone and the iPad are typical example of growth disruptions.

Among industries that still have to go through this shift, is for example the TV industry. We are seeing early stages of TV as a software platform. The car is another example, increasingly controlled by software, and eventually a software platform with apps. Home appliances can also be programmed using software. Many ovens have built-in cooking programs. What if you can download new programs that come with recipes and install into the oven. The biggest disruption will likely be in manufacturing. Designers and engineers have used CAD software for year to print out 3D objects. With 3D printing in the hands of the general consumer, even customised, a huge disruption will take place.

The reason that software is so powerful is that is so adaptable. We saw this with the general computers that disrupted the calculators and all the adding machines. You can install any software and change the machine. For the smartphones today you can, with few clicks, add apps with new functionality. Software can be changed and it can be distributed instantly. Industries that face this disruption are suddenly in the position that part of their workforce has the wrong skill set. Indeed, Nokia and RIM have gone through huge layoffs.

This shift is not only a challenge to companies, but also to the education system. With more emphasis on software we need more technical workers with programming skills. The programmers of the future will be programming hardware we don’t even have today. Think about all the iPhone developers today – those jobs did not exist 5 years ago when many of the developers were in school learning to program.

For those that follow technology trends and try to spot new disrupting technologies and opportunities should add the software technology shift to the list of things to look for. There are many disruptions ahead.

 

 

The Multi-screen Future of the Living Room

Plotting the future of the Living Room

For decades the most important device in the living room has been the TV. People may have stereos and some music speakers but the center of attention is the TV. And to control the TV you need the easily lost remote. Today, more devices are being used in the living room. It turns out that 87% of people are using a second device when watching TV. Still, these devices are isolated and not connected. This is changing. The future of the living room is to have multiple devices, all connected, working together to create an entertainment experience.

When the iPad came out many technology pundits wondered what people would use if for. It was not clear what problem the device would solve. What possibly could it do that a laptop or notebook could not do they would wonder. That did not hinder people from getting a tablet, and it turned out to have many uses. Most people use a tablet to browse the web but many are using it for email, games, and movies. But the real benefit was the ease of use and the multi-touch interface. Grab the tablet and it is instantly on, ready to be used. The laptop still has few minutes of bootup time and using it feels like working anyway.

The tablet turned out to be a perfect companion device when watching TV. The only problems is that the two devices being used, the TV and tablet are two independent devices, not connected in any way. This is what will change. When the TV becomes a software platform, it opens up the possibilities for other devices, tablets or smartphones, even laptops, to communicate with the TV. Controlling the TV with tablet software, is an obvious examples. Other examples are displaying additional information for example in live sports events. Simple example is a tablet app that can ask the TV for which hashtags to look for.

Playing two-screen games is also a good example. In two-screen games, some information can be private, on your tablet or smartphone but shared information can be on the TV screen. Game companies like Nintendo have recognized this potential and will release Wii U, a multi-touch game console, later this year. Both a special purpose devices like Wii U and the tablets have great potential for innovation. The TV revolution is starting.

 

How to create a gaming industry: The story of the Icelandic Gaming Industry

So, what did you do this summer? Well, I helped create an industry. Over the summer of 2009, the Icelandic gaming industry was born. It started at a meeting in a sports bar in downtown Reykjavik on May 6th. That same year on September 28th, with a room full of people, two Icelandic minsters, people from government and industry, leaders of gaming companies, Erik Roberson from Nordic game and a bunch of gamers, the Icelandic Gaming Industry was founded. This is the story.

To be more precise, you don’t actually create an industry. It’s more like you take what is out there and organize, bring people together. But why did this happen in Iceland in the spring of 2009? After a huge economic boom, Iceland suffered a major recession due to the global economic crises that started in the second part of 2008. Three of the major banks got bankrupt and the currency – the Icelandic Krona or ISK (not to be confused with Interstellar Kredit) fell dramatically in a short period.

The growth of the financial sector after the turn of the century had huge impact on the IT industry. In the years prior to the bankruptcy of the banks they had been sucking almost all talent from the IT and the gaming market into the banks. Offering outrageous salaries, the rest of the market could not compete. Even the passionate game designer was tempted by the lure of money.

At the end of the financial era there came a void. It was out of this environment that individuals and young entrepreneurs started to look at games. However, there was another big reason. At the end of the first decade of the 21st century, the field of gaming had shifted. With the rise of online games and mobile games, the playing field in gaming had changed. The cost of productions had dropped. Few passionate game developers could get together, download the tools and APIs and start creating games for iPhone, for Facebook, and for the online web. The only limit was their imagination.

Another important factor was the role of government and industry. In a recession, the government needed some new energy to revitalize the economy. Anything that was positive and showed potential to create jobs and start the economy was welcomed. Even a tiny games industry was enough to catch the attention of the media and politicians.

The industry, however, played a much stronger and active role. With a few game developers that just organized into an organization, the challenge was to form a structured professional entity.  How could a few gamers become a processional organization? The answer turned out to be simple and that’s where the Association of Industries (Samtök iðnaðarins or SI) come in.  The Head of Innovation, Davíð Lúðvíksson, at SI, did not need much time to take action. He jumped at the opportunity to form a new branch within SI.  He set up meetings and helped the group organize into a formal structure. Strategy meeting was held under the supervision of SI and the outcome was a vision for IGI. Thus, IGI became a member of SI and enjoys their professional guidance and formality. This is the reason why IGI remains unfunded and based on the efforts of volunteers but still can function as a professional organization.

What did IGI accomplish? Now we come back the real reason IGI was formed. In 2009 there were several gaming companies in Iceland. Some of these companies looked the government for support. For example, financial support to attend the Nordic gaming conference in Malmö. The reply was always the same: we can’t support a company. This is not surprising. Any direct support from government, using public money, to a privately held company is suspicious. It just doesn’t work. But if these companies get together, form a group to represent them, it’s a totally different thing.

Some of the activities of the IGI include:

  • Monthly meetups where some insiders in the industry or some guests speak about gaming related issues. The topics range from development issues to specific product introduction
  • IGI Game Award: a competition of game development.
  • The IGI conference: The Future is Bright
And indeed, the future is bright. Three years after the initial meeting was held on the second floor of a sports bar, with the roars of the football fans watching a Champions League game in the background (ok, it was Barcelona – Chelsea), IGI is still going strong. Sure, there are lots of challenges ahead and we still need to convince a lot of people that playing games is actually good for you and parents should encourage their kids to play computer games, but at least we are on our way to change the world.