22 August 2016
Written by Emilie Blauwhoff
Cisco has announced that it will be cutting 5,500 jobs, nearly 7% of its workforce. The world’s largest networking gear maker is doing this to transition from its hardware roots into a software-centric business. The company is cutting costs throughout its wider organization and is trying to shift the core focus to the higher-margin software business: “We expect to reinvest substantially all of the cost savings from these actions back into these businesses and will continue to aggressively invest to focus on our areas of future growth.” This development at Cisco is exemplary of a trend that we see throughout the tech world: software is winning the tug-of-war from hardware.
One area where we see this match being played out is the car industry – the real innovation is the software needed for self-driving cars, not the physical car in itself. Instead of the century-old car companies that have dominated in the past – Ford, Mercedes Benz, Fiat, etc. – new players are dominating the self-driving car business – Google, Tesla, and Uber. Tesla is even calling their cars “software on wheels”. As with all disruptive technologies, people are both embracing the developments, as well as being terrified of it. But whatever our conclusion on whether it’s a good or bad thing, we cannot deny that self-driving cars are actually going to happen. Uber has just introduced a fleet of driverless cars in Pittsburgh. No worries, the test cars will travel with safety drivers, while on-board engineers will make use of this opportunity to further the development of the software.
Closer at hand we also see the focus shifting from hardware to software – the iPhone’s popularity is dropping, while the number of apps that we put on our phones is booming. The weather is great and you want to impress all your friends with your BBQ and cocktail-mixing skills? There’s an app for that! You just took a cool picture but want to make it more artsy before you post it on your social media profile? There’s an app for that! Or you just thought of a hilarious Donald Trump-esque description of a famous movie and want to make fun of him publicly? There’s an app for that!
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