Stealth, strategic apps

We know mobile apps at the iPhone store and around other mobile platforms are growing at a torrid pace. We know SaaS vendors are busy developing new platforms and apps. We know where apps are not getting enough attention – the big boys seem much more interested in analytics – Exadata, in-memory excitement.

But there is a category of apps few analysts or bloggers talk about. They are growing rapidly, and they are changing the face of the technology market.

When I read an Accenture study about how “software is everywhere”, I did a quick back-of-napkin assessment. Over 80% of clients I have worked with in the last few years have software (and other tech) embedded in their products or in their digital services. Not just high-tech companies, mainstream industries from consumer products to healthcare to education to financial services.

And they are custom building these apps.

Which means they are getting savvier about the economics of technology. They know what it costs to code and test apps. They know how to run call centers. They know how to manage spare parts and service depots. They know the economics of offshoring.

Not that they ever forgot. Many of these companies wrote code way before most software vendors were born. They successfully migrated past Y2K. They have continued to run elaborate test streams to compensate for the quality delivered by the software industry. They pushed their service providers to adopt Six Sigma, CMM to discipline their software methods.

And their new applications are truly life-blood. They drive revenue. They provide competitive advantage.

When you are working for one of these companies you don’t know whether to laugh or scream when a tech vendor talks about their “vertical depth”. Or tries to convince you about their economics. They are comparing against their vendor peers, not the benchmarks these companies internally have. And you have to resist the temptation to point out they are delusional if they think their offerings are strategic.

The strategic apps are being custom built. And they are stealth. Except they would be blindingly obvious if the tech industry would look beyond its own boundaries.