One last great shift for software

Over the next 10 years, we will see the last great architectural shift in the software industry as everything moves to cloud computing.

Fifteen years ago, there was an inescapable sense that the internet would change everything. It has, and the cloud is the ultimate expression of its disruptive influence. Once cloud has truly taken hold in every sector, the full promise of the internet revolution will have been realised.

The first successful cloud services were from companies such as eBay and Amazon, which put consumer transactions in the cloud. Now, there's no going back.

It may seem like a long time since the days of Netscape Navigator and AOL, but it takes time for things to change after a clearly superior technology emerges. Back in 1980, it was clear that Oracle was the leader in database technology, but it took a long time for the disruptions of that superior relational database to ripple through the system and push out the old guard.

So even though it has been more than 15 years since the public internet opened for business, we will get there.

Ask a venture capitalist when was the last time he or she invested in a company that delivers software on a CD. All the serious development with major backing happens in the cloud, and that will make itself more and more obvious in the next three years.

There is a lot of discussion about whether this move will be to the public or the private cloud, but this suggests that people misunderstand how the cloud works.

The nature of public cloud is to provide secure, seamless access to information and applications. You won't buy services from me if I can't keep that private. More often, the term private cloud is abused by people who are just trying to slap a new coat of paint on the already dead client/server architecture.

Workforce churn is going to play a huge part in the adoption of cloud services in the next few years. Most people coming out of universities now have lived their lives in the cloud. Show them a room full of servers and they're going to ask, incredulously, "What is this? This is how you run your business?"

The Zuckerberg generation was born on the internet, not the PC, and they're going to turn to the internet for their business and consumer needs.

A lot of this change will creep in. Who can say exactly when people stopped visiting a bank just to check their balance? Five years from now, we will see multi-billion-dollar companies running all their core business processes in the cloud, but it won't be part of some grand plan.

We will wake up one day, look around, and realise the old ways have faded away.

And what customer demands and business trends will drive changes in software products, how they're developed, and the industry that provides them? The internet is going to be core to business process.

So any business or industry that isn't willing to truly embrace modern, internet-based cloud architecture will, by default, fall behind and lose out.

The shift from the computer to the smartphone is fascinating. Microsoft has struggled, despite the fact that it basically invented the tablet, because it kept trying to transplant the notion of the desktop computer onto mobile devices.

Nobody wants to be tied to a desk. They want, instead, to be tethered to the cloud. That's why the younger generation uses smartphones for virtually everything we once regarded as the exclusive domain of the PC.

In fact, it seems like just about the only thing they want PCs for, oddly enough, is to make calls using Skype.

Of course, a smartphone can be many things, and a Blackberry has pros and cons that differ from an iPhone. Developers will have their work cut out for them to keep pace with the different options that consumers and business users have, and will need to decide what to support.

Social media is also changing the way companies evaluate their performance. Instead of evaluating quarterly profit/loss statements, we can find out whether we are doing our jobs correctly just by tuning in to what individual customers are saying via social media.

We can capture their words from Twitter feeds, comments and reviews, and what they tell us in transactions. That change will be coming soon, and definitely within the next five years.

The sheer volume of social media content is going to force companies to get smarter about which customers they choose to respond to. Some are squeaky wheels that will simply never be satisfied. Others are canaries in the coal mine and will merit immediate attention. And still others will be competitive saboteurs.

Building the discipline that turns social media into competitive intelligence will not be easy, but it will be necessary.

Regulatory demands are also going to drive consolidation of processes and data storage. The more systems that data flows across, the more difficult it is to coordinate security policies and ensure compliance.

There is no meaningful, consistent way to apply security standards to 25 different systems. Consolidating the number of systems that touch a particular data process, and consolidating all those individual servers running in datacentres and utility closets in thousands of businesses around the globe is going to be a major concern.

Zach Nelson is president and chief executive officer of NetSuite

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