The Application Economy: Why Apps Matter!

AppsA couple of years ago I blogged about the rise of the Selfish App, an application that downloads a lot of data as fast as it can, regardless of the needs of other applications on the network. The reason this ancient history came to mind was a new study about the Application Economy. It’s nice to see that vendors appear to be getting the message that customers focus on getting the job done, whatever the particular job is, and less on the means of accomplishing that objective. Of course the application — or app — is also a means to an end, but it’s a lot closer to what customers are looking for than the hardware, software or service that makes that end possible.

According to the CA Technologies study, How to Survive and Thrive in the Application Economy, “Leaders” who are investing in new innovation and development capabilities are growing revenue at more than twice the rate of “Laggards,” creating an Application Divide in the marketplace. The survey of 1,425 senior business leaders across 13 countries found that “Leaders” are experiencing 68% higher profit growth and are seeing more than 50% new business growth from new products and services.

“There is clear evidence that enterprises of all sizes, in all markets, have to embrace the application economy and place software development and delivery at the center of their business strategy,” said John Michelsen, chief technology officer, CA Technologies. “Business success is tied to application performance, and the ability of a business to drive growth is no longer just about the product or service they deliver, but increasingly about a complete software-driven experience.”

Last October Cisco’s John Chambers kicked off Interop New York by stating that the next step for the network giant would be to enable the application-focused infrastructure. “We’re moving from a web economy to an application economy.”

A month later Cisco took the next step closer to walking the walk, announcing its Application Centric Infrastructure vision. “Applications have become the lifeblood of our economy,” blogged Chambers. “Every business is becoming an applications business. Every industry is becoming an application-centric industry, and the business model shift is only accelerating. We all truly live in an application economy now.”

Don’t take Cisco’s (or CA’s) word for it, just look at what’s happening in mobility. By 2016 there will be 305 billion mobile app downloads.more than 4X the 70 billion in 2013, with 5 business apps per device. While the vast majority — more than 75% — will fail basic security tests through 2015, or that through 2018 less than 0.01% of consumer mobile apps will be considered a financial success by their developers, that’s still a lot of applications that will be floating around.

The bottom line is that the while not all apps are created equal — be they Selfish Apps, or the 99.99% of consumer mobile apps that don’t make the grade — apps matter and the Application Economy is here to stay. For now.

Essential Truths of the Application Economy

#1. Every business is in the software business: If you think your company isn’t in the software business, you’re wrong … Banks, airlines, athletic shoe companies — you name it — are all using applications to attract and engage customers and gain a competitive advantage.

#2. Your infrastructure is now your greatest competitive advantage: IT infrastructure investment is no longer an IT decision—it’s now a business decision, made by C-level stakeholders looking for the best competitive advantage.

#3. DevOps should be your new best practice: You need to build and deploy software faster, more reliably, and this means DevOps, where the creation, testing, and deployment of software is a single, integrated process.

#4. Security should enable the business, not just protect it: Companies are using digital identities from third parties (BYOID) to strengthen security while creating a better customer experience.