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Analysis of the Paradigm Shifts in Software and Business Development


Software is renowned for going in cycles, and every 20 years or so we get a significant paradigm shift. For example, forty years ago, if you wanted computers to do something for you, you went to a mainframe which consisted of computing equipment that filled up entire rooms. Programs were fed to these computers using punch cards, and later on by typing programs through terminals connected to the mainframe. This went on for twenty years until the next paradigm shift which was personal computing. The personal computer (PC) was used at home, as well as in companies, through connections to bigger computers known as servers.

The next paradigm shift occurred more recently, in the last few years. In some respects it is almost a back to the future phenomena. This is because of the move from client servers to the cloud. Cloud computing, or the cloud, can be viewed as a mainframe - but a dematerialized version - since we no longer know the location of this mainframe. This happens to be the dominant paradigm shift of our time.

This article will cover:

  • How cloud computing reduces storage costs when building a business or managing large datasets
  • How the paradigm shifts in software reduce the cost of building a software company and software solutions
  • The role of the paradigm shift and how it benefits the current software and computing ecosystem

We all remember the invention of the PC and mobile devices that were capable of executing highly complex functions. This, in turn, led to the automation of industrial and business processes. These computing platforms were run by applications written with procedural and functional languages such as C, Java, Basic, and Python. These items of software or applications were developed using a pre-emptory strategy where programmers wrote explicit instructions for computers to execute. In the tech community, those heady days are now categorized under the blanket term of Software 1.0. Today, the maturity of containerization, cloud computing, open-source technology, and machine learning has led to a paradigm shift in software from Software 1.0 to Software 2.0.

The paradigm shift that led to Software 2.0 involves a generative process of developing software applications and solutions. In this model, developers no longer have to spell out the steps of an algorithm but produce code by specifying the goals, features or behavioral patterns of the application.

The acceptance of this paradigm shift was due to the model’s ability to provide solutions to real-world problems as well as simplify complex operations. The paradigm shifts in software also led to a change in the equipment previously used for industrial operations. No longer do developers build for deployment on a mainframe or with location limitations in mind. The rise of cloud computing and Software 2.0 changed all that and the ripples are felt in every facet of building and managing a business.


The paradigm shifts in software and cloud computing’s role in enterprise setup costs

One of the dominant aspects of the paradigm shift is cloud computing. Cloud computing has made it possible for anyone to bring an enterprise software company to fruition within a short time with a drastically reduced budget. This is because enterprises can access the cloud, the storage solutions, and the computing power that comes with it. Thus, the need to purchase large mainframes, dedicated servers, and other networking devices has been eliminated.

This drastically reduces the cost of developing an enterprise solution for global use without having to set up stations to house multiple mainframes and host the service or product. This ability to simply create the software and host in the cloud also reduces the cost of building a company around the software application.

According to Martin Chavez, former global co-head of the Securities Division of Goldman Sachs, the paradigm shift in software has reduced the cost of building a software company from approximately $50million to about $5million. This became the most powerful price dropping or deflationary phenomenon anyone has seen, and this is all due to the paradigm shift to the cloud.

Prospective companies can simply lease storage space and computing power at a reduced cost. This means businesses no longer need to invest a lot of money to purchase items such as:

  • Mainframes
  • Client servers
  • Switches
  • Fiber optics

The setting up and configuration costs associated with mainframes and client servers have also been drastically reduced by this paradigm shift. It is also worth noting that the process of coding and testing the software being built can also be done in the cloud. Here again, the development cost is reduced as you no longer need to purchase expensive programming packages and compilers.


How open-source software benefits the business community

Another aspect of Software 2.0 is the increasing adoption of open-source software, communities, and technologies. Enterprises and individuals interested in building software solutions can now leverage on free, open-source programs and the vibrant community around them to develop unique enterprise software.

Businesses no longer have to invest heavily to purchase the tools needed to develop software from scratch. Instead, enterprises can leverage open-source software to build enterprise solutions or run business operations depending on the requirement.

Another benefit of open-source software is the option of leveraging open-source codes to build unique applications that provide specific solutions to business problems. Freely accessible repositories and libraries already provide a foundation for the coding and development phase. The responsibility of managing the open-source platform or solution rests squarely on the community while the business focuses on innovating and customizing the application. The open-source community refers to thousands of engineers, all over the planet, who are freely contributing to refining open-source software on a daily basis.

Choosing to make use of open-source technology and cloud computing are concepts of software 2.0 and represent the paradigm shift in software. This has changed the way businesses structure their operations and the total overhead cost of setting up a software enterprise. It has also played a role in beating down the cost of using previously expensive software solutions for business purposes as most proprietary software now has an open-source alternative.


Taking advantage of the paradigm shifts

The current trend which has led to a drop in price from 50million to 5million, as well as, the proliferation of great free software and the ubiquitous cheap computing resources, has transformed human activity in diverse ways. This leaves the questions: What do these paradigm shifts mean to us? How do we change the way we structure and operate our businesses, and importantly, what does it mean for our clients?

The answer to these questions show that we are in the early days of understanding the impact of this paradigm shift and responding to it.


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