Industry Zero: One man’s thought on software, business and life

Am I crazy for asking this question? Software developers/engineers make ton of money and there are many jobs posting for developer positions everywhere. But if you look at the number, the average salary increase for the past few years for software developer position is just slightly about inflation. That means that it is not as a hot career as it used to be. Remember Automobile workers used to make a lot of money and they never thought the jobs will go away. The question we should ask is that if there is still a very solid business model for software developers.

Let’s look at what type of software engineers are out there.

1. Web developers for consumer websites (Google, Yahoo, Linkedin, etc)
2. Developers who develop internal business apps for internal clients. For example, you work as a developers for a Bank, Hospital, Government, non-profit.
3. Developers who develop commercial products that sold as license copies or Software as service. Examples are Microsoft, Oracle, SAP, Salesforce.com, etc
4. Developers who develop open source products

If you are developers of #1, you are facing two issues. First, can your websites actually generate revenue. What is the business model. If the answer is ad, then you are in trouble…. The second question is: Can someone else build the same cool website in other low cost country and target the same audiences as your website does.

If you are developers of #2, your jobs are slowly being moved to low cost countries. There will still be some left in US. But given a choice, companies want to reduce cost. Since your company’s core business is not software and software doesn’t generate revenue for them, there is not any good reason to keep you around.

If you are developers of #3, you will lose job because of #4

If you are developers of #4, who is paying you while you are working on open source product. What is the business model? You can make money either through service support, book sales (you need to write a book), training.

Unless we can see a good business model coming from #1 and #4, there is not going to be a bright future for developers.