Why the hardware platform is no longer the critical path

Recently, there was an interesting article in the Harvard Business Review, “Does Hardware Even Matter Anymore” by Willy C. Shih, that shows the key to success in the future is launching and updating products rather than focusing on the hardware functionality. As Shih points out, “We are in the midst of a technological revolution that is every bit as profound as the impact of cheap computing power, but it’s subtler and harder to notice. It will ease the way for companies launching and updating digital products, but it presents steep new learning curves that companies will have to master if they are to be successful. What I’m referring to is the migration of functionality from hardware to software. In more and more businesses, physical objects are no longer the primary basis for innovation and differentiation. They come second to innovations in computer code.”


While everyone knows and understands Moore’s law about the exponentially decreasing cost of computer hardware, a similar phenomenon with software is driving the creation of billions of dollars of value and challenging traditional business. It is software that allows cars to park (or drive) themselves, it is software that gets you a ride to dinner (Uber), it is software that allows you to rent a stranger’s house in a city while on holiday (Airbnb), it is software that connects you to friends across the world through messages for free (WhatsApp), etc. Software is both revolutionizing traditional industries (like automobiles) and creating new industries (e.g., messaging).


The challenged is controlling all of this power—computing, GPS, machine learning, motion control, sensors, etc.—and creating applications that serve customers. Shih shows that “abstraction” is providing the tools to leverage this situation, with abstraction defined as “the isolation of something’s essential properties so that it can be generalized and reused for wider application.” Continue reading