The New Software - party like it's 1999

So Netscape had disproved the Law of Gravity - that it was possible and not illegal to create wealth without creating profit, or for that matter without creating revenue. New vistas were possible, and all the failed pioneers of the "video on demand" push (another correct Ellison bet time-shifted back by a decade) had to do little more than change their business cards to jump into the new new thing. The Java language grew out of just such a shift, and several Oracle VoD pioneers quickly hit the jackpot with repurposed "web" businesses.

Two virtuous cycles then spun into being, both with the tailwind of a good economy for most of the decade. In the first cycle, early pioneers in "the web" followed Netscape's path, with similar results. The new millionaires then pumped the newfound wealth back into angel money and venture capital, and funded successive waves of web companies. The second cycle was also a wonder of finance, in which new ventures would do deals with other such ventures for a mix of payments-in-kind and warrants; money didn't have to change hands for wealth to be created, and when any of the players went public, the proceeds would then spread across the industry.

The boom lasted until the Y2K crisis was passed and the tax bill came due in 2000, and produced lots of millionaires, even more chastened investors, and a huge advance in standards (e.g. CSS, JavaScript, Java, Ajax) and some critical framework software, such as Ruby, php, Linux, Apache, and Mysql).

The new companies had money, gusto, talent and energy; what most didn't have was a workable business model. Gravity returned (as gravity will), and it became clear that not only wasn't there a market for lots of online pet stores (to take one example), there might not be a market for any.

The market was ripe for a new model, and The New Software was finally ready to be born.


The New Software - panic in the year zero

Back in hazy Los Angeles, hair had grown dangerously high. In the wake of MTV's timely discovery of heavy metal, the City of Angeles sent out a casting call for multiplatinum blondes and abusers of hair products of all kinds....To anyone with rock-star dreams the smog of second-hand cigarette smoke and hair spray was an enchanting mist. -- Heavy Metal

All booms are sociologically the same - stemming from a core belief that "the xxx (fill in your new new thing here) changes everything. That was 1984, but the scene was repeating in 1994 up north in Silicon Valley. Microsoft was still riding Windows 3.1, with the release of W95 still imminently a year away. Oracle was making big money again, with a successful Oracle 7 DB release, and some momentum on the applications side. SAP was rising to rule the business apps world, with a tailwind from Y2K fears, and strong pull on the delivery side from the consulting world.

Little did any of them know that the hottest action was off in the cornfields of Champaign, IL. By now the Children of the Corn (Andreesen, et. al) are famous and rich, but back then they rose to fame on the realization that computers don't "think" (any more than, as Edsgar Dijkstra dryly noted, [submarines "swim"]( They may compute, but MSFT and ORCL had the business sewn up. What they didn't do yet was communicate, and the CotC took Tim Berners Lee's collaborative innovation and gave it a universal front end.

By 1994 the early wave were downloading prototype browsers, and pointing them at the "World Wide Web" to see if anything was there. There wasn't that much out there yet, and there was almost no ability to find anything, but the promise was real. This was the age ad-hoc tools and services, most of which were to be evolutionary dead-ends that couldn't answer the question "how can we make money at this and scale it?"

Netscape answered the question by lopping the first half off of it, and answering the rest. If software was all about scale, then Netscape was all about scale, with VC funding solving the money problem, and the web itself solving the distribution problem.

The Netscape IPO on August 9, 1995 marked the point of departure - 18 months from inception to IPO, a $2B market cap, all without a clear revenue model! Scale and standards-invention/control were the keys to software wealth, and Netscape had a lock on them for this new "web" thing.

The new new thing in software was off and running.


The New Software - introduction

A number of commenters have speculated about what Microsoft would create after Vista - with the idea being that the market has moved beyond large, monolithic systems deliveries. Google, and specifically Google Labs, is the new delivery model, and in the next couple of posts I'm going to speculate on how the industry evolved to this point, and what it implies for software delivery going forward.

I was a VP at Oracle at one of the specific points when the industry turned, and there are a lot of interesting things to draw from the evolution, and Larry Ellison's (among others) vision for the future. Larry has (cultivates, maybe) an image as a maverick at least, maybe even a crazy man, but in the evolution of software he's been crazy like a fox, and his vision has been spot-on.

Next up: The Year Zero: 1994-1995.


Insanely Great

I've always loved the term "insanely great." It originated, as far as I can tell, with Steve Jobs, back around the time of the original Macintosh (1984).

I bought one of those first Macs in February '84 and I've been a Mac person ever since. The Mac embodies one of my main design goals for software - to make it so pure and intuitive that it teaches itself.

For a great technology and business book that covers that unique, "insanely great" user-focused ethos, I recommend "Revolution in the Valley" by Andy Hertzfeld - great book on the creation of a product that, based on the technologies available, shouldn't have even been possible.

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