The CIO Series: The evolution of a software-based economy

Even 10 years ago, the word “software” meant something completely different than it does today. Back then, we spoke of installing the latest computer programs to our bulky computers. Remember those CDs we kept in storage just in case we needed to re-install the software?

Today, software has transformed the simplest of tasks. Think about how smartphone apps have replaced multiple devices like your camera, alarm clock, calculator, etc. – it’s all software now!

Here’s where things get interesting: software is also enabling a new application economy – where every product is a software service waiting to happen.

Consider this: We live in a world where a leading transportation company owns no cars; a global accommodations provider owns no property; and a world-class educational institution has no classrooms. 

Virtualizing hardware

Turning bulky equipment into software apps allows businesses more freedom to adapt and reinvent customer experiences more quickly than ever before. Making user-friendly updates to a shopping app is much easier than redesigning the layout inside a brick-and-mortar store.

Our AT&T network transformation is a great example of how software is helping us respond to customers’ increasing demand for data. To give you a sense of the impact on our business these days, data traffic on our wireless network has grown more than 250,000% since 2007.

In the traditional model, we managed features and capacity by adding more network devices: routers, switches and other physical equipment. That model doesn’t scale quickly enough in the current environment.

So in the same way replacing alarm clocks, cameras, and calculators with apps made you more efficient, we’re turning network devices into cloud-based apps to make ourselves more efficient. Our goal is to move 75% of our core network functions to a virtualized and software-controlled platform by 2020. We’re well on our way. We hit 34% in 2016. Our goal in 2017 is 55%.

This is helping us extend new capabilities to our customers by giving them control to dynamically update and adjust their network services. For example, AT&T FlexWare(SM) is a software-based solution that allows a customer’s network to respond to the needs of the business it supports.

FlexWare is the virtual edge of our network because we replace towers of hardware with a single device at the customers’ location. It gives them the freedom to add or modify their network functions – like firewalls or application accelerations. All from the comfort of their desks and using an intuitive virtual dashboard.

This means online retailers, for instance, can quickly adjust their network capabilities prior to a major online sale to help manage costs during off-peak seasons. Software enables this tailored experience.

Emerging software-based economy

Today, apps – and even entire industries – can spring up almost overnight. Using software, web companies can quickly address consumer pain points and even launch entire new business models in a matter of days. This means that businesses across all industries are facing both opportunities and disruptive influences driven by this new software-based economy. 

This new ecosystem places technology leaders, like you, at the center of the overall business strategy. You are tasked with helping your company adapt and evolve along with the transformational capabilities that are available and emerging.

I invite you to identify new ways software can transform your business operations. What bulky hardware or even lengthy process would you like to replace with software-based experiences?

The point here is to not limit your vision by what seems possible at this moment – define a future where your business is as flexible and agile as your customers will expect in 5 or 10 years.