One of the smaller headlines yesterday was the report that Apple has passed $1 billion in royalties paid to iPhone app developers.
This represents a sea change in the business of software development. This is a business where, ten years ago, you needed millions of dollars in venture capital to have any hope of make it big. Some of the top books in the field at the time were the books that offered competing management theories for development teams of 5 to 20 engineers. The elite software development tools — mandatory if you were trying to make world-class software — cost thousands of dollars per programmer. And it was not just a matter of paying for the programming tools and the programmers. The word on the street was that you should have about five people in sales and marketing for every person working in development.
By contrast, iPhone apps are created using free software development tools. The tools are built on standard programming languages and open-source compilers. These compilers have become the unchallenged leaders in a crowded field of software development tools. If the number of iPhone apps is staggering, unprecedented in the history of computing, it is mostly because the development tools are stable enough that it doesn’t take a big team of developers, testers, and managers to get anything done.
Most iPhone apps are the work of individual programmers — individuals paying next to nothing for development tools and marketing. The cost structure is so low that it works out if the revenue is low too. If a traditional commercial software project made a profit of $1,000,000, it was a failure, and you knew at least a few layoff notices had to be on the way. If an iPhone app makes a profit of $10,000, that’s enough to pay the rent and throw a party.
And no one should imagine that this trend will stop at the iPhone, or the iPad, or the software development field. What other work could people do more easily, with a lower cost of entry, if better tools existed? And then, where could those tools come from? One thing is certain: the nature of work is changing.
