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2015-06-11 03:20:04
Willy C. Shih
June 09, 2015
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.
Managers are well aware that Moore s Law, the idea that the number of
transistors on a practical-sized chip doubles every 18 months, has brought us a
bounty of cheap computing power, leading to smartphones, tablets, fitness
trackers, cloud-based services like Facebook and Uber, and on and on. But I ve
found that they re less cognizant of how software has transformed other fields
that we traditionally think of as hardware-based.
Consider, for example, how we convert and control electrical power. Think of
the cubes we plug our iPhones into, the sensors that control our heating and
lighting, and the motors used in tiny disk drives and the giant traction motors
in locomotives. Modern solid-state power electronics got started in the 1950s,
but rapid recent progress in power semiconductors, new power conversion
topologies, and methods for controlling electric motors has brought us a
plethora of small, high-efficiency, low-cost, and long-lived electronics
subsystems for motion control. For a few dollars, designers can easily connect
a computer to remember the seat position in your car. They can also replace the
hydraulic power steering with a more-efficient electric power-steering system,
or for that matter control everything needed to make that car autonomous all
it takes is software.
The biggest benefit from this trend is that you can incorporate more
sophisticated control regimes into products. Old-fashioned analog controls
require tuning and are expensive to manufacture. Software control allows you to
plug in control schemes that would be almost impossible to implement otherwise.
I recently rented a Volkswagen Beetle, and I noticed that when I opened the
door the window rolled down just a little bit, anticipating the air pressure
buildup that would occur when I shut the door. I got a nice satisfying door
slam, and afterward the window rolled up. That would be really hard to do with
analog controls, but with software? Easy. That s one reason high-end cars have
as many as 100 microcontrollers and 100 million lines of software running them
to power what Toyota calls hospitality features.
This style of more electric control by software also means big gains in
energy efficiency. With electric power steering you draw power from the engine
only when you need it, not constantly as with a belt-driven hydraulic pump. One
automotive engineer told me that mandated fuel-economy standards were forcing
manufacturers to replace engine-driven mechanical and hydraulic loads with
electric. Lost in the furor over the lithium-ion battery problems with Boeing s
787 Dreamliner were the efficiency gains from the plane s more electric
architecture. Boeing substituted electrically operated subsystems for
traditional hydraulic and pneumatic power in key subsystems like flight
controls, the environmental control system, landing-gear retraction, and
braking. Not only do these subsystems draw engine power only when they need it,
but more electric means less weight from hydraulic lines and ducts. Of course
it also means a lot of lines of software.
The rapid uptake of smartphones has enabled manufacturers to rapidly scale up
the production of sensors GPS sensors, accelerometers, image sensors,
capacitive touch sensors, all kinds of devices that help us measure the analog
world and connect them to our electronic world, where they can control things
on the basis of what we see, hear, or feel. The sophistication and efficiency
of these sensors are advancing rapidly, as you might expect given that their
makers are supplying them for the manufacture of 60 million iPhones and even
more Android phones each quarter. So it has become really inexpensive to add
sensing to all kinds of devices rear, side, and front vision on a car; an
accelerometer to monitor your clothes dryer. The most innovative applications
are probably still to come.
Harnessing all this technology the computing, the motion control, the sensing
poses a huge challenge, but rising levels of abstraction are giving product
designers the tools to meet it. By abstraction I mean the isolation of
something s essential properties so that it can be generalized and reused for
wider application. Many software developers will tell you that the whole
history of the software industry can be described by increasing levels of
abstraction.
Abstraction allows product designers to conceptualize ideas at a higher level,
which enables better and more innovative designs. It s like using building
blocks, adding the custom pieces, and then rapidly deploying them. If you need
a standard building block that gives you internet connectivity, a camera, and a
programmable computer, you can always use an iPad or a smartphone as a starting
point. The advent of the iPad raised the level of abstraction for a whole group
of hardware builders who formerly buried PCs in their systems. Notice all those
new point-of-sale systems, or the remote-control apps that use them? They re
based on the iPad. Cloud computing abstracted away the whole provisioning of
computing services for firms like Uber and Airbnb, as well as Nest and other
hardware builders.
There are important implications for companies. For corporate leaders, one of
the key lessons is that higher levels of abstraction shrink the entry barriers
to numerous businesses it seems that everyone can develop a new digital
product. Companies need to be constantly on the alert for the next
software-based product that might pose a competitive threat.
For product designers, the first implication of the software-replaces-hardware
trend is that a much higher proportion of the value of a product will be in the
electronics. The Boston Consulting Group estimates that the cost of the
electronic parts will rise from 20% of the value in a typical automobile in
2004 to 40% this year. That means a major shift in the supplier network, with
consequences that many are not prepared for.
It also means that much more of a product s differentiation will be expressed
in software. Over-the-air updates give firms the opportunity to add features,
fix mistakes, or optimize performance, after the hardware part has been
shipped, as long as the hardware design is robust enough to handle more demands
than initially planned. When NASA sent the Curiosity rover to Mars, it
discovered a software bug after the spacecraft had been launched. Software can
be updated, but hardware is fixed, one of the engineers explained about the
ultimate over-the-air update.
Software development will be more complex. As engineers take on more-complex
control regimes, real-time software development and simulation tools will play
a critical role in system designs. Complex-systems designers already know how
to do this, but as usage becomes more pervasive, more firms will need to learn
how to manage simulation and testing tools, as well as how to manage software
complexity.
Finally, connectivity will assume a bigger role in the functioning and
differentiation of products. Thus designers will have to take security
seriously. For some applications like automobiles, manufacturers are putting
firewalls between the infotainment side and the vehicle control and powertrain
side. But for many new hardware devices that live on the net, we are entering
a brave new world where security strategy is going to have to be a core design
principle.
The software revolution will be a powerful complement to the cheap-computing
revolution, and the opportunities for unique and innovative products are
boundless it s just a matter of programming.
Willy C. Shih is the Robert and Jane Cizik Professor of Management Practice in
Business Administration at Harvard Business School.