The history of software is dominated by companies that automated how the biggest companies in the world did business. IBM automated clerical tasks, SAP unified corporate financials and Siebel digitized Rolodexes for relationship-driven salespeople. With that focus in mind, it’s no wonder that many of the world’s largest technology companies survive based on their ties to IT executives at Fortune 500 companies.
For all the innovation these relationships have brought to business, there’s been a price: the custom patchwork of disparate technologies that now power global enterprises. Typical IT lacks flexibility and efficiency, and often fails to fulfill its promise to customers.
If you look under the hood at most global businesses, what you find is something akin to a Ford Model-T that has been continuously fixed by an expert mechanic to keep it on the road for a century. It might be a feat of engineering, but there ain’t no way that car will be driverless anytime soon.
Unfortunately for leaders of global businesses, these clunky technical landscapes are doing more than simply irritating employees and customers — they’re jeopardizing their long-term survival.
Full Stack Innovation Atop No-Stack Technologies
Over the last decade or so, software has taken on a different role in our lives. Instead of augmenting business processes, software today is reinventing entire industries. Uber helps us move around our cities. Nest keeps our energy bills low. And Netflix pipes in quality programs on-demand to our televisions.
To deliver these new experiences, entirely new infrastructure is being constructed from the ground up. Chris Dixon at Andreessen Horowitz dubbed this trend the rise of the “full–stack startup.” The term refers to the full stack of capabilities required to succeed. Instead of just developing code, these businesses are tackling new ways of selling, marketing, providing support, manufacturing, managing inventory and so much more.
With so much outdated infrastructure from a pre-Internet era, it’s inevitable that the way we consume even the most basic services will evolve. Companies need to embrace this fact to participate in the software-defined future. But doing so requires a dramatic change in how software is perceived, developed and consumed.
So the question arises, if the tech solutions of the 1980’s and 1990’s won’t suit the needs of today’s innovators, what will?
We see an unfortunately named software class as this change: no-stack technology. In addition to discussion of “full–stack” innovation, there has been a lot of talk about “no-stack” startups — companies that don’t build their underlying tech stacks.
The technologies that power these businesses, no-stack technologies, tend to be API-based micro-services that package up a lot of underlying capability. Unfortunately, the similarity in terms leads many to think that these two are diametrically opposed. They’re not.
Uber, the prototypical full–stack startup, requires no-stack technologies to do so much. Instead of hiring hundreds of engineers to build out capabilities far from their core business, Uber relies on API-based services to power a lot of their communications.
When you locate yourself and request a car, Google Maps helps Uber route drivers to your location (for now). When you receive a text message with a driver en-route, it’s powered by Twilio’s APIs. When your receipt appears in your inbox, it’s SendGrid’s transactional email system.
No-stack technologies make it possible for Uber to satisfy customer needs smoothly and seamlessly. Because even with its full stack of software, marketing, sales and support, Uber couldn’t possibly develop and manage all of the services offered from its no-stack vendors (nor would it want to).
Full–stack innovation is about optimizing customer experiences through digitally enabled business models. To do that, businesses must construct and control the customers’ journey. That doesn’t mean they need to build and own every piece of technology in the process… it just means the technology needs to do what is needed.
Luckily for innovators, no-stack technology vendors such as AWS, Twilio, Stripe, Sendgrid, Zipments, PubNub, Box and so many more are making this possible at an ever more rapid clip.
What The Full-Stack/No-Stack Paradigm Means
As the opportunity to innovate up and down the value chain grows, it would be wise to pay attention to how this new paradigm changes how we do business. We see three key trends:
Flexibility and deployment speed will be defining characteristics of good software. The ability to launch new experiences to customers quickly, and to iterate based on feedback quickly, will be critical to winning in the full–stack world. Selection from technologies that are frictionless to try, reliable and infinitely scalable will be critical to ensuring new software experiences built continuously delight customers.
Developers will become critical decision makers. In a software-enabled world, your developers define your customer experience. CIOs might support some operations, but developers will become de facto decision makers. To win them over, cost will be a factor, documentation and support will be necessary and performance will be critical. It won’t be enough to sell something that’s “on its way” to win in this new world.
Experience will be integrated, technology will be decomposed. To provide the widest array of potential experiences, our underlying technology needs to become truly modular. We need the equivalent of Lego blocks supporting a wide array of designs simply and efficiently. To do this, software innovators need to decompose solutions down to the lowest common levels for the developers who rely on them.
This wave of full–stack innovation stands to change everything. The Fortune 500 brands you’re so familiar with will need to adapt. Software companies will need to transform how they deliver services. But regardless of who wins or loses, consumer experiences will never be the same.Featured Image: Shutterstock