Sramana Mitra: Does that map to any specific types of verticals or industries where there is more activity than others along these lines?
Ajay Gulati: It does. If you think of the cases where people are more prone to building apps, it used to be primarily the technology industry where you would have tech companies building a lot of software. You may have a couple of other industries like biotech or financial services. Over the past five to seven years, more and more companies are becoming software companies.
There was this article by Marc Andreessen that said software is eating the world. The article argued that more and more companies need to be software companies for their next level of innovation if they want to stay relevant. For example if you look at banks, they are building more and more software to make sure that they can provide service much faster. If you’re a standard automobile company, eventually you would not have the competitive advantage that others who are building applications to go with their automobile would have.
In most cases, we see much more adoption in technology, biotech, and higher education. As we are looking at the market, I feel that the adoption is becoming more and more common even in standard industries which previously, weren’t thinking of a lot of application. Now they do.
Sramana Mitra: What other trend-related insights can you provide based on what you’re seeing in customers?
Ajay Gulati: The big trend that I see is that there are two main platforms emerging today. One platform is the mobile phone. Twelve years ago, I purchased a GPS. You may have seen that. We would rent a car and they would give you this box.
Sramana Mitra: We have one for our car here as well.
Ajay Gulati: Once the phones came about with the application functionality, there is not a market for those kind of GPS anymore because navigation is just an application on the phone. If you look at cameras, there used to be a big market for cameras. Now camera is just an application on the phone.
Mobile has become a de facto platform on which you have to build an app. Everyone wants the service to be available as an app and not as a combination of hardware and software. In the enterprise space, cloud has become the de facto platform for application delivery. Previously, there used to be companies selling a firewall which is going to be a hardware plus software combination.
Similarly, you could buy a load balancer which is a hardware plus software combination. Now more and more customers are essentially saying, “I don’t need to buy all of these special boxes to run these special services. I have a cloud platform on which everything should just be an application.” That is the biggest change in the industry where these two platforms are becoming very dominant. Now you just have to play with one of these two platforms if you are servicing consumers or enterprises.
Sramana Mitra: Given all these movements, where do you see the white spaces and the open problems where new entrepreneurs could work on solving new problems?
Ajay Gulati: The nice thing about having such a common platform is that the rate of innovation increases much more rapidly. Imagine 10 years ago, if you came up with an idea and wanted to reach out to 10 million people, there was not an easy way to reach out to 10 million consumers. Now, you can have an app that you can build. You put it on the app store. You convince a certain number of people to download. If the app is really useful, it would catch on. Then you can reach a million users in one year based on how useful the application is. Same thing is true with cloud.
If you want to build an application today where you want to reach out to a lot of people and you want a platform on which you can deploy the application without a significant investment, see how it works, and if your idea catches on, you can scale it. Cloud provides that platform for innovation as well. Overall, the reach has increased in terms of both consumer ideas as well as enterprise ideas.