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Evolution Toward Soft(er) Products

Evolution Toward Soft(er) Products, illustration

Credit: Andrij Borys Associates / Shutterstock

Software is a cornerstone of the economy, historically led by companies like Apple, Google, and Microsoft. However, the past decade has seen software become increasingly pervasive, while traditionally hardware-intensive products are increasingly dependent on software, meaning that major global companies like ABB, Ericsson, Scania, and Volvo are likewise becoming soft(er).10 Where software was bundled with hardware it is now increasingly the main product differentiator.10 This shift has radical implications, as software delivers notable advantages, including a faster pace of release and improved cost effectiveness in terms of development, ease of update, customization, and distribution. These characteristics of software open a range of possibilities, though software's inherent properties also pose several significant challenges in relation to a company's ability to create value.10 To investigate them, we conducted in-depth interviews from 2012 to 2016 with 13 senior product managers in 12 global companies.

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The first interview in 2012 was followed by confirmation and updates in 2014, 2015, and 2016. Common to all 12 companies is that they are continuously moving their products toward being "softer." The 13 managers work on different software-intensive products, from Intel in embedded and mobile software to ABB in power-automation technologies to telecom (see the table here). The central aim was to identify the challenges emerging as a result of companies making their products increasingly soft, specifically those using software as an innovation driver of their products and services.


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