ABSTRACT NO. 003 - 0237
The Impact of the New IT Technologies in the Business Model Transformation
Sixteenth Annual Conference of POMS, Chicago, ILApril 29 – May 2, 2005
Authors
Antonio Carlos Sanchez
MBA, Escola de Administração de Empresas de São Paulo (EAESP)/Fundação Getulio Vargas (FGV)
E_mail:[email protected]: +55 (12) 3927-8960 & +55 (11) 9938-3079
Carlos Yuji Sakuramoto
MBA and PhD Student of Escola de Administração de Empresas de São Paulo (EAESP)/Fundação Getulio Vargas (FGV)
E_mail:[email protected]: +55 (11) 4234-7693 & +55 (11) 9683-8710
Luiz Carlos Di Serio
PhD and professor of Escola de Administração de Empresas de São Paulo (EAESP)/Fundação Getulio Vargas (FGV)
E_mail:[email protected]: +55 (11) 3281-7776 & +55 (11) 9957-2093
THE IMPACT OF THE NEW IT TECHNOLOGIES IN THE BUSINESS MODEL
TRANSFORMATION
SUMMARY
The software industry (computer programs) is one of the most important of the technology
sector, accounting for roughly 20% (US$222 billion) of Information Technology market.
Those programs process data and information assets therefore can be distributed in electronic
format. New technologies, specially the Internet, have deeply changed the business models of
those industries. As a direct result, all supply chain, from the manufacturers to final users,
had to be reconfigured. The present article will show those changes through the correlation
between theoretical concepts and some case studies.
INTRODUCTION AND MOTIVATION
Software industry is one of the most important of the Information Technology (IT) sector.
According to the report “The software sector: a statistical profile for selected OECD
countries” (ORGANISATION FOR ECONOMIC CO-OPERATION AND
DEVELOPMENT-OECD, 1998), its market share was 20% of the total IT sector in 1998. If
IT services are included, then sales figures surpass the ones for computing equipment.
According to the research study “Measuring electronic commerce: international trade in
software” (OECD, 1998), packaged software sales were US$109.3 billion in 1996, and could
reach US$221.9 billion in 2002.
A key characteristic of computer programs is they are information assets, and therefore can
be relatively easily distributed in electronic format. However, with the rise of Internet and
other information technologies, other aspects are now relevant. It is possible to foresee other
business models, which may greatly change the competitive environment.
The effects on business world due to software usage are enormous. It is unthinkable to
imagine the management of modern entrepreneurship without electronic mail, word
processors, and financial systems, among others. Therefore, changes in the strategic
landscape of this sector may have deep implications to others.
Another very important aspect is the fact that the evolutionary speed of the Information
Technology sector is one of the highest, which translates into competitive pressures from up
and down in the supply chain.
In summary, the present article shows how high evolutionary speed sectors (Fine 1999), from
the viewpoint of software manufacturers, are facing the strong competition.
METHODOLOGY
The objective of this article is to show how main companies in the IT value chain are
restructuring themselves, both internally and in terms of its relative position in the supply
chain, in order to face a rapidly changing competitive environment.
Research pillars are the exploration of secondary data and the methodology of multiple case
studies. This approach is highly recommended by several authors, such as follows: Yin
(2001), Flynn et all (1990), McCutcheon & Meredith (1993), Eisenhardt (1995), among
others. Those authors reason this type of methodology is ideal to understand complex
phenomena, which involves the interaction and combination of many variables.
Case studies will be analyzed under certain key theoretical frameworks, which were selected
by article authors. Strategic actions and movements will be studied and correlated to
applicable theoretical models.
THEORETICAL FRAMEWORK
The basic strategy model used for this research was the one developed by CHARLES FINE
(1999). Its fundamental assumption is that there are no permanent competitive advantage, but
opportunities for strategic positioning which vary throughout time.
According to the author, the basic variable that differentiates one sector from others is
evolutionary speed. The aerospace industry, for example, has a very low evolutionary speed,
since on average two new products are designed in a decade, and its life cycle can reach more
than 30 years. Internet sites are on the other extreme of the spectrum. Their content is
changed several times a week. This dynamic environment is shown on figure (1) below.
Figure 1: Market dynamics model by Fine
Source: Fine (1999)
Integrated ProductVertical Sector
Modular ProductHorizontal Sector
NicheCompetitors
TechnologicalAdvances
High Dimensional Complexity
Market Powerof Suppliers
OrganizationalInflexibilities
Profitability ofPatentedSystems
Pressure toDesintegrate
Pressure toIntegrate
An integrated product is the one parts have close functional relationship, and are not
interchangeable with parts from other manufacturers. On the other hand, a modular product
has interchangeable parts from different manufacturers. The vertical sector is the one main
companies internally integrate most of the supply chain. The horizontal one is the one the
supply chain is diversified in several manufacturers for each chain node.
Therefore, when sector structure is vertical and product design is integrated, disintegrating
forces (new entrants, inflexibilities, etc.) pressure the configuration towards horizontal and
modular. When sector structure is horizontal, another set of integrating forces (technological
advances, market power, etc.) pressure the configuration towards vertical integration and
integrated product design.
Authors define the following method to study the supply chain: 1-) Mapping of companies
and technologies of the supply chain, and each company capability. 2-) Answers to five
questions related to the evolutionary speed: 2.1-) What is the evolutionary speed of the
supply chain node under review and the sector as a whole? 2.2-) Which factors (such as new
entrants, technological innovations, new regulatory demands, etc.) drive node evolutionary
speed? 2.3-) What is the expected change in the evolutionary speed of the node due to
increased competition or change in innovation rhythm? 2.4-) What is the sector
configuration? Horizontal structure and modular products, or vertical and integrated? 2.5-)
What is current power dynamic of the node in relation to the supply chain?
Finally, the author describes the methodology to design a strategy for new product
development. Project should be synchronous in three dimensions: product, process, and
supply chain. The name chain for that methodology is simultaneous engineering in three
dimensions. This is an extension of the traditional simultaneous engineering, which attempts
to take into account product and process perspectives in the engineering design. The
simultaneous engineering model taking into account three dimensions is represented by the
author as follows:
Figure 2: Simultaneous engineering model in three dimensions
Source: Fine (1999)
The methodology proposed by FINE (1999) is comprehensive in terms of supply chain
analysis as a whole. However, other supporting theoretical frameworks are needed, both in
terms of competitive forces, and factors that may change the competitive scenario. PORTER
(1985), VENKATRAMAN (1994), and HAMEL (2000) models will support the analysis.
According to PORTER (1985), there are five basic forces exerting constant competitive
pressure on companies: from suppliers, new entrants, substitute products, customers, and
finally from other competitors in the same industry. Its graphical representation is as follows:
Space Architecture
Detailed functions and performance
specifications
Modular versus Integral
SpecificProcesses
ManufacturingSystems
Technology andEquipment
FunctionalversusCells
Architecture
Supply ChainProcessProduct
Technology Focus
Supply Chain Architecture
Logistics and Coordenation
System
Group of Organizations and Resource
Allocation
Autonomous versus
Integrated
Figure 3: Porter competitive forces model
Source: Porter (1985)
The strategy model presented by GARY HAMEL in his book Leading the revolution (2000)
is composed of four main blocks. They are customer interface, central strategy, strategic
resources, and value chain. The relationship of each of those blocks (customer benefits,
configuration, and company borders) determine the cohesion of the model as a whole.
Finally, the strategy should be based on factors with potential to generate value (efficiency,
unique, fit of the parts, and profit boosters). Its graphical representation is as follows:
Figure 4: Gary Hamel business strategy model
Threat of New Entrants
Suppliers Bargaining Power Bargaining Power Buyers
of Suppliers of Buyers
Threat of Substitutes
Substitutes
Industry Competitors
New Entrants
Intensity of Rivalry
Source: Hamel (2000)
When the business environment is sensitive to intensive use of information technologies, and
depending on how technological insertion takes place, deep changes may happen. They may
range from internal processes to the relationship between internal and external customers.
Even the business model may transform completely, as shown in the figure below:
Figure 5: Model of technological insertion and its benefits
Source: Venkatraman (1994)
High
RevolutionaryLevels
EvolutionaryLevels
Low HighPotential benefits
Deg
ree
of b
usin
ess
chan
ge
Business Scope Redefinition
Targeted Exploration
Internal Integration (Processes)
Process Reengineering
Business Network Reengineering
In summary, models employed in this paper were the following: 1-) Double-helix model
(figure 1); 2-) Mapping of companies and technologies of the supply chain, and each
company capability. 3-) Simultaneous engineering model in three dimensions (figure 2); 4-)
PORTER (1985) competitive forces model (figure 3); 5-) HAMEL (2000) business strategy
model (figure 4); 6-) VENKATRAMAN (1994) model of technological insertion and its
benefits (figure 5).
SOFTWARE INDUSTRY MAPPING
According to FINE (1999), the first step of the software industry analysis is to determine
technologies, companies and capabilities of the sector.
The different software products will be classified according to an adapted terminology
developed by LAUDON & LAUDON (2000).
SYSTEM SOFTWARE
According to LAUDON & LAUDON (2000), system software can be divided in three
categories: operating systems, utilities programs, and programming language translators.
Mapping of technologies and companies is shown on the following figure:
Figure 6: Mapping of technologies and companies for the system software sector
Source: Authors
Programming language translators will not be analyzed, since they represent a very particular
technical aspect, with limited reach to the final users.
Operating systems coordinate the various events between different computer components,
allocating available resources, and monitoring proper processing functions. In summary, they
control all basic functions of the computer.
Utilities programs coordinate and control routine machine operations, such as file ordering
and listing, printing, among others. They also manage pieces of information, such as file
creation, deletion, and merge.
Open-source code systems, i.e., programming codes that are not proprietary and are open for
any user to change it, are represented by the initial developer name.
Operating Systems MicrosoftCoordinate computer events DOSAllocate computer resources Windows 95/98
Monitor events Windows NT/2000Windows CE
Utilities Programs IBMSystem Routine operations OS/2
Software Information managementBell Labs
Language Translators Open-source codeInterpreters UNIXCompilers
Linus TorvaldsOpen-source code
LINUX
Brian BehlendorfOpen-source code
Apache
AppleMac OS
In terms of technology application, DOS, Windows 95/98 and O/S2 are stand-alone computer
programs. Windows NT/2000, UNIX and Apache are typical network software. Linux and
Mac OS are used for both stand-alone and network cases.
APPLICATION SOFTWARE
The second broad division proposed by LAUDON & LAUDON (2000) is the application
software. Those programs were divided into four categories according to the authors as
follows: programming languages of first, second, third, and fourth generations. Mapping of
technologies and companies is shown on the following figure:
Figure 7: Mapping of technologies and companies for the application software sector
Source: Authors
Programming languages of first, second, and third generations will not be reviewed in this
article, due to their technical specificity and less reach to the final customers.
First generation Query languageprogramming languages Data base SQL
Machine language Natural languageArtificial intelligence
Second generation etc.programming languages
Assembly language Report generatorsApplicationSoftware Third generation Graphical languages
programming languages SAS, Systat, etc…Fortran, Pascal, Cobol, Basic, C, etc…
Application generatorsFourth generation
programming languages High-levelprogramming languages
APL, Nomad2
Applicationsoftware packages
Programming languages of fourth generation are divided into eleven sub-categories, which
are as follows: query languages, report generators, graphical languages, application
generators, high-level programming languages, application software packages, software tools
for PC, object-oriented programming, HTML, XML, and the middleware.
The present study will focus on software tools for PC, object-oriented programming, HTML,
XML, and middleware. Several application software, such as report generators, graphical
languages, and application generators, are already part of other packaged programs, or have
very specific application. High-level languages are specialized technical subjects, and are not
of primary interest for this research.
Application software packages are targeted to specific areas, such as commercial,
mathematical, and scientific applications. Several different programs have been developed for
business applications, ranging from the traditional MRP (Material Resources Planning) to
financial market analysis, market forecasts, among others. There are a considerable number
of companies competing in this market. It is an expected behavior, since there are many
different applications in the business arena. A separate study is required to cover all the
complexity of this specific software sector.
Object-oriented programming is a technology, which application software is developed and
can be reutilized by other programs or users. Java, developed by Sun Microsystems, is
probably the most known example of object-oriented programming.
HTML (Hypertext Markup Language) is a programming language aimed at formatting
different elements in a page of a document. Those elements can be parts of traditional
documents, or even direct links to Internet pages. It is an open-source code program.
XML (Extended Markup Language) is a development of the HTML. Programmers can give
specific meaning to different fields in a document page. Therefore, differently from HTML,
which is basically a page-formatting tool, XML allows organizations to exchange information
through those fields with specific meaning. It is also an open-source code program.
The generic name middleware refers to a series of programs that allows incompatible
software applications to exchange information. One of the most known applications in this
field is the CORBA (Common Object Request Broker Architecture).
Software tools for PC are the well-known word processors, spreadsheets, databases, etc. They
are explored in more detail in the next sub-chapter, due to some specific aspects important for
the research.
Software tools for PC
According to LAUDON e LAUDON (2000), software tools for PC can be divided in eight
different groups. They are as follows: word processors, spreadsheets, databases, graphical
presentations, integrated packages, e-mail software, Web browsers, and collaboration tools.
They are all tools extensively used in any business, and help improve worker productivity, as
described by the same authors. Mapping of the software tools sector is shown on the
following figure:
Figure 8: Mapping of technologies and companies for the software tools sector
Source: Authors
MAPPING OF THE SUPPLY CHAIN AND COMPETITIVE POSITIONING
Now that technologies and companies were identified, the next step is the mapping of the
supply chain and the competitive positioning of each node in the network. The graphical
representation is shown on the following figure:
Figure 9: Mapping of the supply chain: software industry (own model)
Word ProcessorsMicrosoft Word, Corel WordPerfect, etc.
SpreadsheetsMicrosoft Excel, Lotus 1-2-3, etc.
Data BasesMicrosoft Access, Oracle, etc.
SoftwareTools Graphical Presentatiosfor PC Microsoft Powerpoint, Lotus Freelance Graphics, Aldus Persuasion, etc.
Integrated PackagesMicrosoft Office, Lotus SmartSuite, etc.
E-mail SoftwareMicrosoft Outlook, Sendmail, Eudora, Lotus Notes, etc.
Web BrowsersInternet Explorer, Netscape Navigator, etc.
Collaboration ToolsLotus Sametime, Microsoft Netmeeting, etc.
OperatingSystemsSuppliers
Software Tools
ProgramsSuppliers
HardwareDistributors
SoftwareDistributors
Suppliers
ApplicationSoftwareSuppliers
Corporate
HomeCustomers
Object-Oriented
for PCCustomers
Source: Authors
Figure 9 shows the direct link between two nodes in the chain, and not the full path from the
origin of the commercial relationship to its final destination. For instance, operating system
suppliers can deliver their products to hardware distributors, who in turn deliver to corporate
customers. This convention gives clarity to the graphical representation and is easier to
analyze.
Microsoft products dominate the operating systems segment, as noted by SHAPIRO &
VARIAN (1999) and FINE (1999). Windows (95/98/NT/2000) is the main product line. It is
a vertical sector with integrated products. It is very important to note that technological and
competitive moves in this sector will impact directly almost all others. This is due to the fact
that software tools for PC and application programs are, in most cases, designed for a specific
operating system, which is its development platform.
Microsoft also dominates the software tools for PC segment. The integrated software package
Microsoft Office has approximately 90% market share, according to SHAPIRO & VARIAN
(1999). Lotus Netmeeting, an IBM collaboration tool, is a strong competitor to Microsoft
products. Netscape Navigator web browser had a very strong market position in the past,
which has been lost to Internet Explorer due to an aggressive Microsoft strategy. Finally,
according to the article “Out in the open” (SURVEY, 2001) the e-mail software Sendmail is
responsible for two-thirds of the world’s e-mail traffic. However, when the software tools
sector is viewed as whole, Microsoft is the dominant supplier. It can be classified as a vertical
sector, with integrated products.
Object-oriented programming, HTML, XML, and middleware are programming languages,
which are primarily used for generating other applications. Taking into account the focus of
the present study, more important than identifying the competitive structure of that sector
according to FINE’s (1999) model, is the analysis of the impacts of those development tools
on the supply chain as whole.
Now that the supply chain has been studied according to the method proposed by FINE
(1999), next chapters will cover the factors that may change the dynamics and competitive
positioning of those sectors chosen for analysis.
SOFTWARE MIGRATION TO THE INTERNET
Article “Gathering steam” (SURVEY, 2001) highlights software is becoming more a service
accessed through the Internet, and less a product distributed by disks, CD’s, the World Wide
Web, etc. It is important to note it is not only a technological change, but also a change of
economics logic and business model. The same research notes that computer programs,
which are information assets, are developed and sold according to industrial production
patterns. It means software companies develop their products, distribute them, and then turn
back to the next version, which have more new tools added. In summary, the incentive,
positively reinforced by the stock market value, is not to offer easy of use and reliability, but
increasingly complex programs. Software migration to the Internet translates into new
services, targeted at customers needs, not at the producers’ interests.
In terms of programming code technology, that move of platforms should be very
pronounced. It is due to the fact software pieces were not developed to work in the Internet
environment. The stand-alone or network codes were designed to work with those platforms,
and should be replicated in each single client computer. Therefore, the most efficient
technological solutions should work with one single hardware and software platform, which
attends to several different clients.
Another important technology in this context is the networks based on the Internet, named
P2P (“Peer-to peer”), or in its general form, “the Grid”. In general terms, they are programs
that allow direct communication between computers, creating networks within the Web.
Thus, there is no need of direct intervention of a central server. The primary intent is to
leverage computational resources available, as described by the article “Profit from peer-to-
peer” (REPORT: COMPUTER NETWORKS, 2001).
After this quick review of the technologies involved, next paragraphs will analyze the three
main strategies of software migration to the Internet identified by the present study.
CASE STUDIES
MICROSOFT STRATEGY FOR SOFTWARE MIGRATION TO THE INTERNET
Microsoft project named .NET has the main objective to develop a system for Internet
servers. Microsoft’s position, reported in the article “Gathering Steam” (SURVEY, 2001), is
that even if software migrates to the World Wide Web, local processing power of stand-alone
clients is still necessary. It shows a clear intent of developing a standard for servers closely
related to the Windows operating system. The development code is the C# language
(developed by Microsoft), and associated tools Visual Studio.NET. Information exchange
standard will be XML.
P2P networks will likely reinforce the strategy above, since they suppose local and
distributed processing power as previously presented. Simple Internet stations with no
operating systems or processing power do not fill those requirements, as highlighted by the
article “Out in the open” (SURVEY, 2001).
In case Microsoft architecture obtains a competitive advantage over others, the sector of
operating systems suppliers will be dominated by the Windows standard. Moreover, that
dominant position will be transferred to Internet servers, which will work with the .NET
system, plus the functionalities for P2P networks.
Similarly, software tools for PC will continue under Microsoft control. Programs such as
WinWord, Excel, Access, PowerPoint, and integrated packages will likely stay resident in
stand-alone stations, not in Internet servers. However, it is also very likely Microsoft will
develop several other applications specific for the Internet. One example is the Hailstorm
quoted in the article “Waiting for the killer Apps” (KHARIF, 2001). Nevertheless, in case
Microsoft strategy prevails, revenues from those new services will add up to Windows based
systems, and not cannibalize them.
Hardware and software distributors, and home and corporate customers will continue to pay
user licenses to Microsoft. Probably buyer lock-in will be even stronger, due to the close
relationship between the stand-alone computer and Internet server standards.
IBM STRATEGY FOR SOFTWARE MIGRATION TO THE INTERNET
IBM is also developing its own project for Internet servers, named Websphere. Its main
philosophy is distributed processing. Specific software applications will remain resident in
different Internet servers, and will process data from different users. The standard for
information exchange will be the XML, as reported by MARKOFF (2001).
P2P technology is the essential complement to IBM strategy. As described by the article “Big
Blue’s tech on tap” (ANTE, 2001), IBM intends to spread the use of open-source code
programs, which drastically reduces costs associated with operating systems and software
tools for PC, and sells products and services aimed at P2P network setup. Application
programs offered will be collaboration tools, middleware, efficient use of networks, and
super-computing.
If IBM proposal has widespread acceptance, then value will significantly shift in the supply
chain. The usage of open-source code software will undermine Microsoft dominance in
operating systems and software tools for PC. Cost reduction due to adoption of open-source
code software will be a strong incentive working favorably for IBM, even taking into account
investments in training, migration to other platforms, among others.
Value transfer in the supply will be greater to the direction of hardware and software
suppliers. Former will supply mainframes needed for managing P2P networks, while the
second will provide consulting services to configure them. According to the article “Big
Blue’s tech on tap” (ANTE, 2001), market experts evaluate that IBM is better positioned in
those areas, in technological, personnel and financial terms. So it is easy to imagine who is
going to appropriate most of the value shift previously mentioned. However, the same article
highlights that Compaq, Hewlett-Packard and Sun Microsystems are searching similar
objectives.
IBM is targeting corporate consumers, as noted in the article “Big Blue’s tech on tap”
(ANTE, 2001). Nevertheless, in case open-source code software becomes easier to work
with, then it is possible to imagine that market penetration can reach home users too.
Therefore, it is likely that the operating systems and software tools for PC sectors will
become horizontal, with modular products. Supply chain value will then shift to the hardware
and software suppliers.
SUN MICROSYSTEMS STRATEGY FOR SOFTWARE MIGRATION TO THE
INTERNET
Sun Microsystems strategy is based on a distinct technology when compared to the others
presented so far. Its basis is object-oriented programming language Java.
The article “Battle of the platforms” (SURVEY, 2001) highlights that Java 2 (“Java 2
Platform, Enterprise Edition”, or J2EE, its most recent version) is not only a programming
language, but also a development environment, which gives professional programmers a
more suitable platform. Another important fact mentioned in the same article is that most
Web applications are developed with Java; specially those tailored for corporations, and are
executed in servers compatible with J2EE platform. The main reason for that success is the
easy and fast development of new and very specific programs, since modules previously
designed can be reused as basis for new applications. In summary, Sun proposal is distributed
processing in the Web, based on the J2EE platform.
Articles “Waiting for the killer Apps” (KHARIF, 2001) and “Software’s next leap is out of
the box” (MARKOFF, 2001) reports that Sun started a new project named Sun Open
Environment on April 2001. Sun’s goal is to offer a new development platform named JXTA
specially designed for P2P networks. The main objective is to offer an open-source code
language, which allows fast and easy design of experiments with Internet based networks, in
a similar way Unix contributed to the development of corporate networks.
Since JXTA does not require a user license agreement, apparently Sun intends to sell services
for P2P network development, along with its servers. There is one evidence in the article
“Big Blue’s tech on tap” (ANTE, 2001) showing the previous statement may be correct. It
reads that in 2001 Sun launched a new super-computing project based on P2P networks. As a
consequence, IBM and Sun strategies for P2P networks are very similar, excepting for the
development platform.
Concluding, since J2EE does not depend on the operating system, it is possible that the latter
looses much of its importance. The market for software tools for PC will become horizontal,
with modular products. Value will shift in the supply chain to the direction of hardware and
software suppliers. Sun can benefit from services and server sales, and J2EE platform license
agreements.
COMMENTS AND CONCLUSIONS
One important characteristic of the software sector is its intrinsic nature of dealing with
information assets. Therefore, the widespread use of the Internet, which is a very efficient
medium for distribution and coordination for that type of asset, launched new basis for the
development of new business models. Taking into account that evidence, the present paper
was able to identify that software migration to the Internet is in reality a combination of new
technologies and organizational models based on the Internet.
One important conclusion of the research is that there are strong forces to change the relative
competitive positions in this market, threatening Microsoft dominance in operating systems
and software tools for PC. It is also possible that value shifts considerably in the supply
chain. Moreover, those tendencies may reflect a transition to a new logic of economics for the
sector. Computer programs would be no longer viewed as products, but as services instead.
Therefore, it would be a very significant realignment of interests.
Nevertheless, Microsoft reaction power cannot be neglected. In more than one occasion it has
been very aggressive, efficient, and effective. So it is not possible to assure that this industry
focus will completely shift to services. In fact, even in terms of technological solutions, it is
very unlikely there will be a pronounced dominance of a computer program, just like
Windows is the dominant player in the operating system arena. So it is more reasonable to
suppose there will be several different options for business and technological solutions, at
least for the medium-term time frame. Thus, middleware software will probably continue to
be important applications for integrating different platforms and programs.
The value creation process, in this kind of industry, is being transferred to the final customer,
through Alpha and Beta version of software that used to be distributed to the clients in order
to get important feed back from them to enhance and correct the program to be incorporated
in the next version, and so on.
This process transforms the customer in the key element that powers the entire industry
supply chain, and also provides them exactly what they want and need. This evolution would
change drastically the entire business model of software and hardware industry from a
product into a service base business. Instead of buying and keeping updating the software, the
user may just use any software they want, need and desire, anytime, anywhere and in any
machine.
If the software industry changes into a service based, so the hardware industry will have to
change too, in order to make possible the business model transformation. Instead of
enhancing local processing machine, the next evolution could be a central and massive
parallel processing with a huge data center.
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KEY WORDS
Strategy; Programs; Computer; Industry; Software; Hardware; Companies, Technology; Capabilities; Processes; Products; Supply Chain.
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