Code Wars: The All-Industry Competition for Software Talent

Code Wars: The All-Industry Competition for Software Talent

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Code Wars: The All-Industry Competition for Software Talent

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  • A Growing Imbalance

    Large imbalances in the demand for, and supply of, software talent exist today. They are the result of multiple factors, including the sheer volume of code, growing demand and mounting technical requirements for code and for technologies that are tailored to specific applications, the rising importance of intellectual property (IP) at all kinds of companies, and increasing complexity in the way code is used.

    More Code. Several laws of software growth are ascribed to Nathan Myhrvold, a former chief technology officer at Microsoft, and they all arise from a common underlying point: software will expand to fill the space available to it. The rise of the industrial Internet and machine-to-machine connectivity, the increased prevalence of cloud computing, and consumers’ seemingly insatiable desire for mobile connectivity have led to more and more pervasive software usage in recent years—and new sources of demand will keep driving usage in the future. While software was once something that the IT guys dealt with, today it is integral to myriad business functions. New software-intensive technologies—additive manufacturing (also called 3-D printing) the Internet of Things, and robotics, for example—are invented seemingly every day, but older technologies, such as payroll automation, hang around, too. They still work fine; they can be tweaked and improved. The lines of code keep multiplying.

    More Differentiation. Software, once just a part of a company’s value proposition, is turning into the key differentiator. Companies in industries from automobiles to textiles, and from utilities to apparel, are using software to enhance product design, cut costs, reduce development time, and improve speed and agility. Enhancing customer “stickiness” with customer-relationship-management programs, for example, is a software-driven function. Software programs help determine how to offer the right products and services at the right time and how to create new business models, converting a product into a service, or a sale into a subscription. All the hype, and indeed the value, associated with big data is possible only because of the underlying software technology. Netflix committed $100 million to produce its hit series House of Cards for reasons that included insights gained through algorithmic programming and from the Apache Cassandra database about the company’s customers, the original British series of the same name, Kevin Spacey (the U.S. star of the series), and David Fincher (the first U.S. director of the series).

    More Strategic Advantage Through IP. As BCG has recently pointed out, smart companies are increasingly using IP, including software, as a means of establishing competitive advantage in the marketplace. (See The Most Innovative Companies 2013: Lessons from Leaders, BCG report, September 2013.) Protecting IP rights—that is, maintaining exclusive ownership of a product or process—is also an important defensive strategy. The recent avalanche of high-profile patent cases and patent sales, mainly in the technology and telecommunications sectors but also in others, has made it clear that innovation depends, in part, on owning an idea. Strong innovators are more than twice as likely as their weaker counterparts to consider IP criteria when deciding which new product ideas to push forward. They are more likely to use IP as a source of competitive advantage.

    And, Ultimately, More Complexity. Software applications bring many benefits, but they also add complexity and challenges for management. Software often needs to be tailored to individual functions and uses. Cloud computing and big data are transforming companies. Market leaders, many in traditional industries, such as manufacturing, consumer products, and financial services, are investing heavily in technical talent. Can others afford not to follow suit? Building new capabilities requires many kinds of software expertise. Interoperability—making both new and old functions work together—adds another layer of software-rich complexity. Daily headlines on security and security breaches underscore another major challenge for companies holding valuable digital data.