This week, Hewlett-Packard (where I am on the board) announced that it is exploring jettisoning its struggling PC business in favor of investing more heavily in software, where it sees better potential for growth. Meanwhile, Google plans to buy up the cellphone handset maker Motorola Mobility. Both moves surprised the tech world. But both moves are also in line with a trend I've observed, one that makes me optimistic about the future growth of the American and world economies, despite the recent turmoil in the stock market.
In an interview with WSJ's Kevin Delaney, Groupon and LinkedIn investor Marc Andreessen insists that the recent popularity of tech companies does not constitute a bubble. He also stressed that both Apple and Google are undervalued and that "the market doesn't like tech."
In short, software is eating the world.
More than 10 years after the peak of the 1990s dot-com bubble, a dozen or so new Internet companies like Facebook and Twitter are sparking controversy in Silicon Valley, due to their rapidly growing private market valuations, and even the occasional successful IPO. With scars from the heyday of Webvan and Pets.com still fresh in the investor psyche, people are asking, "Isn't this just a dangerous new bubble?"
I, along with others, have been arguing the other side of the case. (I am co-founder and general partner of venture capital firm Andreessen-Horowitz, which has invested in Facebook, Groupon, Skype, Twitter, Zynga, and Foursquare, among others. I am also personally an investor in LinkedIn.) We believe that many of the prominent new Internet companies are building real, high-growth, high-margin, highly defensible businesses.
Nicely argued techno-optimistic view on the future for software from Mark Andreessen.
As it happens, I agree with his view that we're reaching a new plateau of productivity with software. I found it striking that his argument is a point in time illustration of the forecast from (the worth a read) "Technological Revolutions and Financial Capital: The Dynamics of Bubbles and Golden Ages" from Carlotta Perez in 2003 about the relatively predictable cycles of adoption and economic shift for major technological innovation and the expectation, as one of her reviewers put it on Amazon that we "are in the last throes of a technological bubble and just preceding the next period of productive improvement and profit from the disruptive technologies in the 1990" Check it out http://www.amazon.com/gp/product/1843763311.
Interesting times for the software 'game' ...
No comments:
Post a Comment