If you ask Ken Berryman, principal and co-leader of McKinsey & Co.'s North American Software Practice, he says innovation remains "the most significant driver of returns" in the software business. "If you look back over the past 30 to 40 years, there have been extraordinary returns by those who radically innovate, not incrementally innovate."
Ray Lane, general partner at Kleiner, Perkins, Caufield & Byers, believes, though, that the dynamics of innovation are changing. Today the emphasis needs to be on the "how," not the "what," he told a crowd at a software industry event last week. In other words, how to do things better or how to take cost out of a process. He also argues that too many software companies are spending so much time chasing the next big thing that they neglect some of the little things that can make that last big thing work better. Perhaps it's radically simplifying software that exists today, providing better integration, building a service-based model that lets customers make changes quickly. (It's certainly not making Linux customers worry about further innovation and growth!)
Perhaps it's better quality. Says Romesh Wadhwani, chairman of Symphony Technology Group, "Customers want more innovation and quality. They have every right to ask for Six Sigma quality."
I couldn't agree more. As the software industry starts to pick up steam, it's time for innovation, simplicity, and quality to meet face to face.