Proprietary software grew up, starting really in the 1980s, as an alternative and that became the dominant model with the rise of companies like Microsoft and Oracle and the like.
Sentiment: POSITIVE
In 1986, Microsoft and Oracle went public within a day of each other, and I recall telling one of my colleagues that the software business will become big. So I started working with software companies in the mid-'80s and never turned back.
An awful lot of successful technology companies ended up being in a slightly different market than they started out in. Microsoft started with programming tools, but came out with an operating system. Oracle started doing contracts for the CIA. AOL started out as an online video gaming network.
My own theory is that we are in the middle of a dramatic and broad technological and economic shift in which software companies are poised to take over large swathes of the economy.
The business models in enterprise have changed pretty dramatically. A huge problem with enterprise software traditionally has been usually you sell to the customer and then they adopt the technology. The great thing about 'freemium' and the new way enterprise software is being sold is you get to try it first and then buy it.
Then people started using it more and more and it became the most downloaded software on the internet.
The electronics industry expanded rapidly and the seeds for the semiconductor and software revolution were planted. The postwar period also saw the suburbanization of America, the rise of the homeowner, the build-out of the interstate highway system, and the rise of automobile culture. Credit availability expanded dramatically.
When Paul Allen and I started Microsoft over 30 years ago, we had big dreams about software. We had dreams about the impact it could have.
It became clear to me by 1984 that Microsoft was likely going to be the big winner in the PC software apps and operating system category, partly because of the dynamics of owning and controlling the operating system: that gave you enormous power, and I came to see Bill Gates was fierce competitor.
We got bigger, much scarier competitors. We ended up with Microsoft, a company with all the money in the world, the way I look at those guys. And IBM, another company that, historically, dwarfed us.
There's nothing more frustrating than seeing cynics sit there and say, 'Well, nobody can make any more money because Microsoft and Intel own everything.' Is the software industry mature, or is it embryonic? I would say it's embryonic. There will be a hundred more Microsofts, not just one.
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