Willy C. Shih in the Harvard Business Review:
What I’m referring to is the migration of functionality from hardware to software. In more and more businesses, physical objects are no longer the primary basis for innovation and differentiation. They come second to innovations in computer code.
Managers are well aware that Moore’s Law, the idea that the number of transistors on a practical-sized chip doubles every 18 months, has brought us a bounty of cheap computing power, leading to smartphones, tablets, fitness trackers, cloud-based services like Facebook and Uber, and on and on. But I’ve found that they’re less cognizant of how software has transformed other fields that we traditionally think of as hardware-based.
Consider, for example, how we convert and control electrical power. Think of the cubes we plug our iPhones into, the sensors that control our heating and lighting, and the motors used in tiny disk drives and the giant traction motors in locomotives. Modern solid-state power electronics got started in the 1950s, but rapid recent progress in power semiconductors, new power conversion topologies, and methods for controlling electric motors has brought us a plethora of small, high-efficiency, low-cost, and long-lived electronics subsystems for motion control. For a few dollars, designers can easily connect a computer to remember the seat position in your car. They can also replace the hydraulic power steering with a more-efficient electric power-steering system, or for that matter control everything needed to make that car autonomous — all it takes is software.
More here.