You’ve probably heard that researchers at AMD are predicting the death of Moore’s Law, at least in terms of silicon-based computing. If you don’t already know, Moore’s Law is a theory based on the prognostication of Intel co-founder Gordon Moore in 1965. He stated that computing power for the world doubles every two years — and the corollary, the price of computing would drop precipitately.
Moore’s Law held true for almost 50 years. Think of mainframe computing power now to the average smart phone; what once cost millions is now down to just a few hundred dollars.
And while Moore’s Law may be close to running its course, it has already solidified its place in the annals of the information revolution and modern computing. The “law” has led to tremendous economic growth and generally a higher standard of living worldwide through the power of computing technology.
From thousands of dollars to $.99
Of course, Moore’s Law mostly related to hardware computing, meaning central processing units (CPUs) or integrated circuit chips. However, there is another trend that has been taking place that is at least equally as dramatic, although not nearly as publicized. The price of software applications has plummeted, while the functionality and quality has grown exponentially.
Think about it. You can download a finance application to your iPhone for $.99 that would have cost you thousands of dollars just a few years back.
Today, trends like open source software, easy-to-use development tools, lower computing costs and cloud computing are making it easy for entrepreneurs to quickly develop quality software applications. Before, applications would have required raising capital, highly skilled computer scientists and long development cycles — all of which kept software prices high. Now (in our hyper-inflationary world), software is one commodity that is actually deflationary.
Rapidly changing landscape of software apps
Companies run software applications that automate nearly every aspect of their key business processes including manufacturing, support, finances and customer relationship management. Collectively, integrated applications are called enterprise resource planning (ERP) applications. A decade ago, the license and implementation costs, ongoing maintenance and support were anywhere from hundreds of thousands to millions of dollars.
Historically, these applications were provided by the likes of SAP, Oracle and IBM. Now, a company can find software as robust and perhaps even more agile for a few thousand dollars a year. In many cases, these are software packages offered in a software-as-a-service (SaaS) model. Since the business does not need to install or maintain the software, that drives costs down even further.
Plus, between app stores like the Apple App Store, Google Marketplace and Google Play, there are millions of web and mobile business applications that range in price from a few dollars to a couple hundred dollars. Businesses can use these apps to replicate a modern “ERP,” including apps for Sales & Marketing, Customer Management, Document Management, Scheduling, Project Management, Billing and HR — everything they need to automate and streamline their businesses.
Like Moore’s Law, this software trend will continue for some time. You could argue that the software version of Moore’s Law is more dramatic (again, think $.99), even if it doesn’t predict the birth of mankind.
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