Software Industry Operates Like 19th Century Craft

Although software is a trillion-dollar industry, it still operates like a 19th century craft, says Charles Stack, president and CEO of Inc., a marketplace and portal for software components.

That's because when programmers create new software, they still tend to start from square one, building an application out of nothing.

"Components represent the industrialization of software," Stack says from his company's headquarters in Cleveland. "If you are reusing something that's already written, it's a lot less work."

"Components encapsulate complexity," Stack says. "For example, 20 years ago if you were putting a roof on a new house you would order two-by-sixes. Today you would call a truss company and they would send you prefabricated, load-tested, quality-assured components and much of the work would be already done."

Stack first recognized the beauty of components during one of his early ventures when he developed software for asbestos litigation back in 1990 when Visual Basic was the first widely adopted development tool that supported third-party components.

"We were able to produce a lot of software of higher quality more rapidly than we had before," Stack says. "My recognition of that opportunity came up in 1998 when we formed Flashline."

Stack's company offers a full range of services to fulfill software component needs, including a marketplace, a set of minimum-quality standards, a clearinghouse for best practices, and an outsourcing service. The opportunity in this market is big.

Of the trillion-dollar software industry, 70 percent is in internal corporate software development. Components so far have probably a less than 1 percent penetration in that segment, Stack says. Gartner, however, is projecting that component penetration in that market segment will grow to 70 percent in the next 4 years.

"It just makes sense," Stack says. "Corporations have managed other intellectual assets such as copyrights, trademarks, and patents. It's time to manage software as an asset. It offers a very big return in an area that has been looked at as a cost center in most organizations."

Stack's first-hand information about the growth of the component market shows that it is starting to take off. "Three months ago my big issue was, 'Are we too early for this industry?' " he says. "My issue now is, 'Are we going to be able to grow this fast enough?' "Maybe that's because corporations are starting to notice the cost-cutting benefits of building software with components. For example, Stack says, there's a group of programmers that are several more times productive than the rest. If you get those programmers to build components, then everyone who uses those components becomes a great programmer.

Stack says every 10 percent increase in programmer productivity is equal to $10,000 in bottom-line savings.

And by making the complex task of building software into a simple task of assembling components, any company can realize that savings.

"This is the first business I've been in that my mother understands," Stack says.

Charles Stack

Age: 46

Current position: President and CEO, Flashline.comTechnology predictions: Components, XML, the Java 2 Enterprise Edition (J2EE) architecture, and technologies that enable a large amount of digital content to fit in the palm of your hand will be big

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